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.
.
No comments:
Post a Comment