Major Types of Accounts

Individuals, Joint & Minor

Sole proprietorship
Partnership concern
Joint Stock Companies
Others (Agents, Executors,
Administrators, Clubs, Societies
etc.

Individuals Account

Accounts of literate ladies and

gents.
Accounts of illiterate ladies and
gents.
Accounts of Parda observing ladies.
Joint Accounts
Minors Account

Problems In Individuals
Account

In case of Death, Two situations

Died without will

Died after leaving a will
In case of died without will an
administrator will be appointed by the
court while in case of died with will
and executor will be appointed by the
competent court.

Problems In Individuals
Account

Insanity of an Individual customer

Balance shall be placed at the option of

the manager in lunacy, appointed by
the court, through lunacy order, under
the Lunacy Act, 1912.

Servicing of a Garnishee Order

Insolvency of an individual customer

Insolvency is civil death

Provincial Insolvency Act, 1921

Joint Account

More than one person

Relationship is neither of trustees nor of
partners.
Definite instructions required regarding:

Operations
Payment of balance in case of death

Any joint account holder may lodge stop

payment instructions.
Removal of these instructions require
consent of all the members.

Joint Account

Member can delegate authority to

operate to a third party.
Any such authority will deemed to be
cancelled in case of death of the that
member of account.
In case any of the members of joint
account becomes insolvent, or insane,
operation on the account should be
stopped.
If any member dies, operations of the
account should be immediately stopped.

Minors Account

According to S-3 of the Majority Act,

1875:

A person who has not attained the age

of 18 years is said to be a minor.
However, where the guardian is
appointed by the court of law, majority
extends to 21 years.
Legally a minor cannot open a bank
account since opening of a bank account
is the result of a contractual relationship
which minor does not possess.

Minors Account

Operation In the Account

Minor can neither give stop payment

instructions nor can claim the balance
during his/her minority
Operation of the account,
nevertheless, shall rest with the
guardian.

Minors Account

Operation In the Account

In case of death or insanity of a

minor, balance is to be paid to the
person authorized by the court of law.
In case of death, insanity or
bankruptcy of the guardian, balance
in the account is to be paid according
to the instructions of the court of law.

Sole Proprietors Account

It is a kind of business which is

controlled and owned by a single
person.
Proprietor himself is required to
operate the account
Proprietor can give authority to a
third party for the operation of
account.

Sole Proprietors Account

Authority to operate is automatically

revoked in the following
circumstances:

Death of the proprietor

Insolvency / bankruptcy of the proprietor
Insanity of the proprietor
If a Garnishee Order has been served on
the firms account.

Sole Proprietors Account

In case of death of authorized

person, all cheques are to be
counter signed by the proprietor.
In case of death of the proprietor,
operation of the account should be
stopped immediately.

Partnership Accounts

Partnership is the relation between

persons who have agreed to share
profits of the business, to be carried
out by all or any one of them acting
for all.
Eligibility, Number of Partners, signing
capacity and partnership deed.
Operational authority can be
delegated to third party.

Partnership Accounts

Incoming of a new partner

Retirement of a partner
Death of a partner
Insolvency of a partner
Insanity of a partner
Bankruptcy of the firm

Joint Stock Companies

Private Limited Companies

Public Limited Companies
Operations in the account:

Death, retirement or dismissal of the

directors does not effect operation on
the account.

Joint Stock Companies

The cheque signed by the directors

before their death, should be honored
since they are considered valid
instruments.
Winding up of the company in any
manner terminates its career.
Thereafter, no cheque is to be
honored and operation of the account
to be stopped immediately.