Minor
Minor means a person who is below 18 years of
age
According to the Indian
Contract Act, a minor is under a legal incapacity to enter into a contract and
therefore any contract with minor is void. Thus minor has to have a guardian of
his person and property.
·
Whether a minor can draw a valid cheque – Section 26 of the NI
Act provides that minor may draw, endorse, deliver and negotiate a negotiable
instrument and so minor can draw a cheque. Ordinarily balances in such accounts
are subject to a maximum specified amount and that the age of the minor is
above 13 years. The account can be
continued when the minor attains the majority.
It is advisable to take a confirmation of balance in the account signed by him
immediately on attaining majority
·
Whether he would, on attaining majority be bound by the withdrawals made
by him when he was a minor – yes.
·
No Loan /Overdraft can be given to minor. This is because, a minor can
make others liable on the Negotiable Instrument, but he himself cannot be made
liable.
·
Even though a minor is not competent to contract, he can be appointed
and act as agent for another person competent to contract. That is he can be
agent of his father, but he will not be personally liable for what he does on
behalf of the major.
·
A minor below age of 7 can not open an account independently
·
Under Section 30 the Indian Partnership Act, a minor can be admitted to
the benefits of the partnership. But the minor is not liable personally for
the debts of the firm.
Lunatics
Joint Hindu Family
Joint Account Holders (207)
A joint account is an account opened by two or
more persons Insanity of a joint account holder Insolvency of the Joint account
Holder
Death of a Joint account Holder As the mandate taken for
the operation of the account also
deals with survivorship, on the death of one of the joint account holders, the
survivors are entitled to the whole amount both under the law of devolution
applicable to joint owners and by the customer of bankers. Where the mandate is
operation by joint signatures and if one of them dies, the balance is payable (or
recoverable from if debit balance) to the survivor and the legal heirs of
deceased (or recoverable from estate of deceased in case of debit
balance).
Accounts in the Name of Joint Hindu Families
(JHF) The members of the family are called coparceners and the eldest male
member is the manager or the Karta.
When an account in the name of the JHF is opened all the adult coparceners are
to sign the Account opening form, even though the Karta would operate on the
account.
Accounts
in the Name of Partnership Firms (106)
A
partner has no authority to give a guarantee on behalf of the firm and if such
guarantee is to be given, it should be signed by all partners.
Retirement of Partner
Death
of Partner: The death of partner has the legal effect of
dissolving
the firm, as his legal heirs cannot step into his shoes. The surviving partners have the right to
carry on the business for the purpose of winding up.
Any cheque presented for payment should be paid
only with the consent of the surviving partners
When the account is in
debit balance, the operations should be stopped to fix the liability of the
deceased partner.
Insolvency
of partner:
Insolvency
of any partner will result will result in the dissolution of the firm. A
cheque signed by such a partner should not be honored without the
confirmation from other partners, who may continue to operate the account for
winding up the business.
Partnership account and the partner’s private
account
Position
of a Minor: under Section
30 the Indian Partnership act, a minor can be admitted to the benefits of the membership.
He can therefore become a partner and act as a agent on behalf of the other
partners of the firm. But the minor is not liable personally for the debits
of the firm.
Collecting Banker – Duties and Responsibilities
(84)
1. Protection available to Collecting Banker
Holder For Value – banker parted with funds
before collecting the proceeds of the cheque.
2. Non-liability of a Banker
Receiving Payment of a Cheque Requirements of Section 131
Crossed Cheques – No Statutory protection is
extended to cheques which are forged.
Collection on behalf of Customers –The
collection should be done on behalf of its Customer.
Receive Payment in good
faith and without negligence
Where the endorsement on
the cheque or the drafts is fictitious and the collecting bank failed to check
it, the collecting bank was not protected under section 131.
Other
Account Holders (114) (212)
Memorandum of Association
|
Memorandum of Association
|
: lays
down the objects of the company and
|
|
limits the scope of its operations to specific
areas
|
|
|
Articles of Association
|
: internal management of the company
|
The directors of the company ha
The directors
of the company have to function within limits of the power conferred by the
Articles of Association and when they do so, these acts are binding on the
company. If the directors acts in excess of the power conferred, but within the
purview of MOA, such acts can be ratified by a general meeting of the
shareholders. But, if the acts are outside the scope of MOA, they will be ultra
virus (ultravires) of the company and will not be binding on the company. The
directors will be personally liable for such acts
Accounts
can be opened in the name of
Limited Companies after getting the following papers.
i. Certified copy of articles of Association – deal
with rule and regulations governing the internal management of the company –
powers of the directors, officials and shareholders.
ii. Memorandum of association – objects of the
company and limits the scope of its operations to specific areas.
iii. Copy of Certificate of Incorporation –
Certificate by ROC.
iv. Certificate to commence business
v. Certified copy of the
resolution passed by the Board of Directors The account opening form should be
signed by the authorized signatory. Introduction
is not necessary for a opening a company account.
Bank open accounts in the name of clubs and
associations on completing the following formalities
Registration Certificate under the Societies
Registration Act, 1960 or under Company Act
A Certificate copy of by-laws, rules and
regulations.
List of members of the
managing committee
Certified copy of the
resolution of the committee to open the account with details of authorized
signatories
Account must be properly introduced and no loan or temporary overdraft
should be granted.
Accounts of Trusts are also opened after getting the following
documents
i. Copy of the Trust Deed
ii. Charitable Trust
certificate from Commissioner of Charities should be held if it is charitable
trust.
iii. Resolution passed by the trusts to open the
account and conduct it by the authorised person
iv. Account is opened in the
name of executors and administrators. The account should be properly
introduced.
v. The trustee cannot delegate their powers unless otherwise specified in
trust-deed.
Accounts in the Name of Executors /
Administrators
A copy of the probated bill or the letter of
administrator should by obtained, verified
Administrator is a person appointed by the Court to look
after the property under Letter of Administration.
A person to whom the
execution of a will is entrusted by the deceased (testator) is called the executor
of the will.
Liquidator is a person appointed by a Court to wind up
the affairs of the Company.
Section 125
of the Companies
Act provides that
all charges created
on company’s assets have to be registered with the ROC (except pledge)
within
30 days of creation of the charge.
Certificate
of Incorporation – issued by ROC
Certificate
of Commencement of Business
Issued by ROC
Required for PUBLIC LTD. Companies
Not required for Private
Ltd. Companies
Advances
to Companies
The purpose of
the advance should be within the scope of the MOA of the company
The MOA should empower company to borrow
Section 293 (1)(d) of the companies act provides
Board of Directors of the Public Company shall not borrow limits in excess of
paid up capital of the company and its free reserves.
Section 125 of
the companies act provides that all charges created on a company’s assets have
to be registered with the ROC within the 30 days
of creation of charge.
Accounts
in the Name of the TRUSTS
The instrument by which the trust deed is
created is called the TRUST DEED
i.
Copy of
the Trust Deed
ii.
The title of the trust account should tally with the provisions of the
TRUST DEED.
iii.
If the trust deed indicated specific bank, the account should be opened
with that bank.
iv.
The
resolution passed by the trustees should be obtained.
v.
The trustees can not delegate the powers unless they are specifically
authorized to do so by the trust deed.
.
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