Thursday, 18 June 2020

BOARD RESOLUTION FOR OPENING OF BANK ACCOUNT

BOARD RESOLUTION FOR OPENING OF BANK ACCOUNT


A Board resolution merely certifies and documents a particular decision taken by the Board of Directors of a company. All the relevant decisions made by the Board are documented by the passing of the resolution for the same. However, for the passing of a particular resolution to stand valid, there are certain prerequisites which need to be satisfied:-
The minimum number of directors must be present in order to constitute a Quorum.
The resolution has to be passed on the letterhead of the company.
The company files must contain the said resolution within 30 days of the Board Meeting.
A chairperson will be appointed for the meeting.
Who can sign the board resolution?
As per Sec. 21 of Companies Act 2013, resolution can be signed by any Key Managerial Personnel (which includes a Managing Director) or an officer of the company duly authorized by the Board. Hence there is nothing illegal, if the resolution is signed by the Managing Director.
How long is a board resolution valid?
A maximum of seven days from the date of receipt of draft of the resolution may be given to the Directors to respond and the last date should be computed accordingly.

What is exactly meant by board Resolution for Opening of Bank Account?
Board resolution for opening a bank account is a resolution passed in a Board Meeting authorizing certain persons in a company to open and operate the Bank account of a Company or LLP.
Why Board Resolution needed for Opening Of  Bank Account?

A distinct feature of companies is the fact that they operate as a separate legal entity in the eyes of the law. This means that the company can hold property in its own name. In light of this, the bank account of the company is usually opened in the name of the company itself. However, in order to carry on the regular functioning of this bank account, at least one authorised signatory needs to be appointed. The person appointed as the authorised signatory will require his signature to be provided for any bank-related work with regard to the company account moving forward.
Board Resolution Format for Opening Bank Account

The Chairman informed the Board members about the need to open a current Account with the (Bank Name and Address) for conducting its day-to-day financial transactions. After discussions, the Board unanimously: 
“RESOLVED THAT Current Account in the name & style of ‘(COMPANY NAME)’ be opened with the (Bank Name and Address), for the operations of the activities of the Company and that the following Authorized Signatory(ies) of the Company be and are hereby authorized to open and operate the said account:
INDIVIDUALLY
1.    Authorized Signatory
2.    Authorized Signatory
JOINTLY
1.    Authorized Signatory
2.    Authorized Signatory
AND THAT the said Bank be instructed to accept and act upon any instructions relating to the account kept in the name of the Company or relating to any transactions of the Company with the Bank, provided the instructions are signed by the authorized signatory(ies) of the Company in the manner mentioned as above.
THAT the said Bank be instructed to accept receipts for money, deeds, securities or other documents or papers or property or any indemnities given on behalf of the Company provided they are signed by the authorized signatory(ies) of the Company in the manner as mentioned above.
THAT the bank be furnished with a list of the names of Directors of the Company and a copy of the Memorandum & Articles of Association and be from time to time informed by notice in writing under the hand of the Directors/Authorized Signatory of the Company of any changes which may take place therein and be entitled to act upon any such notice until the receipt of further notice under the hand of any Directors / Authorized Signatory.
THAT the resolution be communicated to the Bank and remain in force until duly rescinded and notice thereof in writing be given to the Bank by any of the Directors of the Company.”
“RESOLVED FURTHER THAT the aforesaid power entrusted to the said official shall be valid and effective unless revoked earlier by the Board or shall be exercisable by him so long as he is in the concerned to the Company.”
“RESOLVED FURTHER THAT all acts, deeds, things, matters, etc. as aforestated shall be deemed to be valid and enforceable only if they are consistent with the instant resolution as may be relevant in this case and that the Board shall not be responsible for any acts beyond the scope of the afore-stated powers done by (Name of the authorized person(s) and such invalid, illegal acts, and acts done beyond the scope of  powers granted in this Resolution shall not bind the Company against any third parties or before any authorities  in any manner and that the Board shall not be answerable in that behalf.”
FURTHER RESOLVED THAT a copy of this resolution be and hereby be submitted to Union Bank of India duly certified by company secretary of the company.
For (COMPANY NAME)
(Director Name)


PREPARED BY:

SUMI SUNNY
MANAGER HR(INTERN)
AIRCREWS AVIATION PVT LTD




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