Partnership - opening bank a/c

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Querist : Anonymous

Querist : Anonymous (Querist)

08 December 2012 a. Is it necessity to provide a copy of Partnership Deed(registered/unregistered)to open a Current a/c in the name of partnership firm. Is it not sufficient if all the partners sign the opening form and denote in the opening form as to who will operate the a/c?

b. If bank opens an account in the name of partnership firm without the deed, what will happen on death, retirement, admission of a partner?

c. In absence of deed, can bank be sure on the exact number of partners in the firm.

d. Under partnership, act of one partner binds all others. Can two partners open bank a/c and issue cheques and bind 8 other partners in a firm having 10 partners.

e. Please answer point by point

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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08 December 2012 Simpaly do One Thing,
Make a Partnership Deed, Its Very Simple.
and mentioned evrything whatever you wanna in deed.
like of your third query.
Bank will not check everytime your no. of partner, this is just a formality.

as many as partners can open bank account, no such restriction.

Querist : Anonymous

Querist : Anonymous (Querist)

08 December 2012 Donot give flimsy answers.
If you know the subject then answer point by point.
Donot reply just to kill the query or to increase your answered count.

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@VaibhavJ

@VaibhavJ (Expert)
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08 December 2012 Hi

a) It is necessary to provide partnership deed as per KYC rules of bank to open bank A/c

b) Once bank opens A/c for a firm then all operations are under taken by authorized signatory of Bank A/c. So say eg if you have authorised 3 out of 5 partners as authorised signatory then if anything happens to one of them or all of them other partners will be in trouble operating bank a/c.
So generally it doesnt happens that bank openes a/c without partnership deed. If it so then you should immediately submit partnership deed.

c) In absence of p.deed bank can not be sure of exact no. of partners.

d) Yes 2 partners can bind others by mentioning same in p.deed, however as mentioned earlier in happening of unseen events remaining 8 partners wud be in trouble since they will not be able to operate A/c unless their names names are added in list of authorised signatorie of bank.

Pl note by adding & removing partners without notifying banks, no partners gets admission in list of authorised persons & gets removed. So if X was partners & also in the list of authorised sign. in bank, & he is resigned out of P. firm, its is remaining partners duty to inform bank about the same & get his name removed else Mr. X has full power to operate bank A/c till time.

Thanks.

@VaibhavJ

@VaibhavJ (Expert)
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08 December 2012 one more thing Mr. Anonymous.

Answer of Mr. CA. Ayush was short & sweet may be you have failed to understand.

Thanks.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

26 July 2013 Excuse me for answering this query:

a.Yes. It is necessary to submit a partnership deed to open a bank account.

(i) This would strengthen the KYC of the firm and its partners.
(ii) As per law a partnership can be registered or unregistered. Bank cannot insist registered deed to open an account. But it would add strength to KYC of the firm as well as its partners.
(iii)In absense of partnership deed, bank would not know whether all the partners have signed the Opening form and whether those who have signed the form are the real partners or benami ones.
(iv)In addition to partnership deed some banks take declaration of "no-change in constitution from the date of deed produced" signed by all partners, as a safeguard.

(b)Opening of partnership a/c without deed is not valid for the reasons mentioned in your query.

(c)No

(d)No. Opening of a/c without disclosing full details and by not producing partnership deed, becomes act done outside the scope of partnership. Hence, other partners are not bound legally by these acts.

(e)Done.

Querist : Anonymous

Querist : Anonymous (Querist)

03 December 2015 I am satisfied with the last answer.
I appreciate your inputs and thanks for answering.