Types of Customer for Indian Banking System

Our society is full the different type human being living together. The society always try to provide the get suitable job for everybody. Even then it does not matter whether the individual is a blind person or deaf and dumb. Everybody have a right to live their life. Like this the Indian Banking system also have different types of customers & have different type of accounts to accommodate different types of customers. But the rules to operate is also different. To know more about different types of customers kindly stay with the blog.

If we talk about in context of Indian Banking System and saw beyond the period of before nationalization of commercial banks, so we have found that the banking system in Indian was for certain group of people of the society. Every person of the society was not free to open the account and different types of customers were not free to take advantage of the banking services of the commercial bank. Apart from that the banks were also least interested to save to rights of the customer. That was the time when most of the banks shut down their doors and declared themselves as bankrupt.

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Now the time had came when the Indian Banking System had became nationalized and status of the commercial banks had been changed from particular to general. Now banking had in the reach of everyone. Resulted a large number of different types of customers would be able to come in the contact of the banks and banks have to make arrangements to handle their different types of customers.
Different types of customers are as under –

01) Minor
02) Adult Person
03) Married Woman
04) Purdanashin
05) Blind Person
06) Illiterate person
07) Incapacited person
08) Insane person
09) Intoxicated person
10) Insolvent
11) Executor and Administrator
12) Liquidator, Receiver or Assignee
13) Hindu Undivided Family
14) Joint holder
15) Proprietorship Company
16) Partnership Company
17) Joint Stock Company
18) Society & Club
19) Trust
20) Cooperative Societies
21) Agent & Attorney

Minor

The first category of the customer for banks are the Minors. The terminology minor is in banking is the customers who have not attain age to 18 years. The customers as minor looks like very simple but they may become very complicated. The definition of minor as per law in India –

In India the people who are below the age of 18 are called as minors. As per the Indian law any person who have attained age 17 years and 364 days will be created as a minor. In India the age of majority has been decided by Indian Majority Act of 1875. But if the child born is appointed a guardian or he/she is under court of wards (Where the court appointed the guardian) then he/she attains majority after his completion of 21 years of age or a child of foreign domicile is also attains majority only completion of the age of 21 year.

In context of the opening of account in bank the minor category can also be further divided into two age groups.
01) Age group from zero to nine years
02) Age group from ten to seventeen years.

  • If the minor comes under the age group zero to nine years than the minor can be open any of the bank account such as savings /fixed / recurring deposit account with jointly with their natural, legally or appointed guardian.
  • if the minors comes under the age group from ten to seventeen and desire to open a bank account, so the minor can open and operate a savings bank accounts independently.
    Now a question has come in my mind that what is the need to open a minor bank account, when the minor have no income to save it ?
    The answer may be, in this present scenario as soon as the minor took berth and the time starts when he / she gets some money on many of the ceremonies and the parents / guardians want to save this money that’s why they want to open a minor bank account.
    In the second case where the minor fall under the age group of 10 to 17 years. At this age group the minor thought that he became older now and he wants some pocket money for his personal use. The parents / guardians may open a minor bank account which will be operated by the minor himself but the parents / guardians can make check on the account transactions. One more reason behind to start the minor bank account by government was to develop the habit of saving at their early age.

The discussion on the minor’s account is very vast and important also. It will discuss on any other blog. If the readers are interested to know the details on minor account please comment.

Individual

In the category of Individual’s any citizen of India attained the age of 18 years can be able to open bank account. There are many types of accounts in the Indian Banking System like Saving Bank, Fixed Deposit, Recurring Deposit, NRE Account, FCNR Account, ONR Account and much more. The individual’s who attain age of eighteen and more can also avail the different types of loan facility offered by bank in the Indian Banking System. In this category of Individual Bank Account there are two more categories of customers. they are the Blind Individual and illiterate Person. The Bank have to perform extra cushion while opening of account as well as while operating the bank account.

Blind Person

Like other individual a Blind person can also open bank account and take a loan from the bank. His contract is as valid as the contract of a normal person. The bank has to maintain extra caution while opening and operating the account. Every time when he come to bank any transactions he must be accompanied a literate normal person for witness. When the blind person withdraw cash from the bank the cashier must ask him the amount he want to withdraw and the witness must sign on the back of the cheque as witness and write the words received certain amount.
The Blind person can open saving and fixed deposit account but he can not able to open a current account.
In any case no minor account has to be opened in the name of a blind person.

illiterate person

who is illiterate person in India ?
The definition of illiterate is someone who is unable to read or write any language is treated as illiterate person. Any person who can able to read but not able to write is also treated as illiterate person but any person who can write but can not able to read is treated as literate person. So in India any person who can write his name is treated as literate person. Like other individual a illiterate person can also open bank account but while sanctioning the loan the bank must be extra careful. The bank has to maintain extra caution while opening and operating the account. For every transaction he have to come personally to the bank branch. Before opening of the bank account of a Illiterate person the bank has to explained all the terms and conditions of the account which the illiterate person want to open and must keep the evidence that the terms and condition had been explained to the illiterate persone and make sure that the illiterate person must understand those terms and conditions and must take their Thumb Impression for the purpose of entering into the agreement along with two recent photograph. One photograph must be pasted on the account opening form and other one must has to be pasted on the front page of the passbook issued to the illiterate person. Every time when the illiterate person come to bank he/she must carry their passbook apart from that the bank has to noted down one of the mark of identification of the illiterate person.
In any case no minor account has to be opened in the name of a illiterate minor.

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Married woman

Married woman is a normal customer to bank as other male married individual. In India the legal status of a married woman is regulated by the Hindu Succession Act 1956, Married Women Property Act 1874 & India succession Act 1925. The married woman is considered to have a separate legal entity in the society. The marriage can not affect any of the right of have her own & separate property. Section 14 of Hindu succession act provides that the property of a Hindu Female is her absolute property.
The married woman is free to open any account in the banking system but bank has to taken care the following precautions while opening and operating the account of a married woman.
01) If any overdraft limit sanctioned to the married woman the bank must ensure that the liability in taken care by her own property.
02) The married woman can be declared as insolvent by the court for\ her own debts, even though her husband is solvent. so bank must be little careful while sanction a loan or overdraft.
03) The husband of a married woman shall not be liable to repay the loan taken by her except
a) If the loan is sanctioned by the consent of her husband.
b) If her husband stand as a surety of her loan
But If the married woman taken loan to fulfil her basic necessity of her life than her husband will have to repay the loan even though he may aware or not. In the case of married woman where she maintains her account in her maiden name (name before marriage) and after marriage she wants to change her name in the account. so it is permissible.

Purdanashin Woman

The purdanashin woman is a lady who remains in complete closed environment and she is not allowed to transact of any type of business
with the people other than her family members. That’s why the contract made by her is not a contract with free from all defects because the presumption of undue influence always exists in her contract. Hence the bank should always take all precautions in opening an account in name of Purdanashin Woman.
01) Generally, the banks should always try to discourage to open the account in the name of Purdanashin Woman because the identity of the account holder cannot be ascertained.
02) if necessary, the account should be opened in the name of literate woman only.
03) The current account should not be opened in any case.
04) The signature of Purdanashin woman should be attested by her husband on the account opening form, if the woman is unmarried the signature should be attested by her natural guardian.
05) Photograph of the purdanashin woman must be obtain at the time of account opening.

Incapacited person

The Incapacited person is also become a customer of the bank and can be open a bank account.
First of all we have to know who is Incapacited person ?
A person who is Incapable to come to the bank branch in person or Incapable to sign the cheque to withdraw the money from his account, This can be happen due to illness or any other reasons. The characteristics of a Incapacited person can be understand with these examples. Suppose, a soldier who lost his both of the hand in the battle field, so he will not be able to put his signatures, even then he have no thumb to put the impression also. or if a defence personals lost his both the legs in the action or get any type of injury by which he will not be able to move and unable to come to bank branch in person or any other general person who come under the same category can also be allowed to open his bank account.
Now a question come in mind that what is the need to have a bank account of an incapacited person ?
The answer may be that the incapacited person can be get his pension to credit or the incapacited person may get some compensation for his accident, that’s why the Incapacited person will also need a bank account. There are so many other reasons where an incapacited person be a part of the customers list.
The incapacited person can be able to put his thumb impression, which should be witnessed by two independent witnesses known to bank and one responsible bank official who take witness that the witnesses have signed in his presence.
In the case where the customer cannot be able put his thumb impression as the soldier who lost his both of the hands as mentioned in the example. In this case the bank can be able to make the payment by obtaining two independent witnesses, a witness of a responsible bank official along with a certificate from competent doctor.
The opening and operating the bank account of a incapacited person is very challenging by the bank officials and bank has to take extra caution while operating such type of bank accounts.

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Insane / Person with unsound mind

To understand the meaning of Insane person we have to go through the provisions under Indian Lunacy Act 1912. The act says that an Insane or lunatic person means a person who is of the unsound mind and as per the section 12 of Indian Contract Act 1972 says that a person of unsound mind is not capable of entering into any contract or a contract made by an Insane person or person with unsound mind is not valid.
The account of a insane person cannot be open by the bank
One question come into my mind that what happen if a existing customer have became Insane than what happen with his existing account ?
In this case where lunatic person is already a bank customer than as soon as the bank came to know about the fact the bank should immediately stop all the transaction of the account and inquire about the correct position or wait till the court’s order for appointing a receiver.
What happen with account if the customer suffers from temporary mental unsoundness ?
In this case the bank have to obtained the medical certificate about the soundness of customer’s mind from two approved doctors regarding the mental condition of the customer at the time of make payment.
It is always safe that the bank have to avoid dealing with such type of persons.

Intoxicated Person

Intoxicated person is as a person like lunatic person. At the time of his intoxication he may not be capable to understand the cause and nature of his action and not in a position to form rational judgement, what will the effect of his intoxicated decision upon his interest.
The law provides that all the contracts made by a person in a drunken state are void.
If the account holder comes to the bank in a drunken state for withdrawal of money from his own account. In such case the bank may make the payment if the intoxicated customer provides witness. The witness must be accepted to the bank. The bank employee cannot give the witness.

Insolvent

What is the meaning if insolvent ?
Insolvent is an official term in which an individual or company can not be able to meet their financial obligations to lenders and in that situation the financial obligations can be called dues. Whether the insolvent person will inform their lenders or creditors ?
Yes, before an insolvent person or company gets involved in insolvency proceedings, he will likely be involved in informal arrangements with their creditors and inform what are the alternative arrangements he is setting up to settle down his outstanding dues.
What are the laws related to Insolvency ?
There are two laws relating to insolvency governing in the country.
01) Presidency Town Insolvency Act 1909. This law is applicable in Mumbai, Calcutta and Chennai only.
02) Provincial Insolvency Act 1920. This law is applicable all other parts of the country.
Who can be declare insolvent ?
The creditor or the person himself can approach to the court for declaring him as insolvent.
What is the effect of declare insolvent ?
The effect of declaration of insolvent renders invalid all the transactions entered into subsequently and already being entered into with in last six months.
What will the action of the court after declaration insolvent?
The entire estate of the insolvent person or company will be transferred to the official assignee or official receiver appointed by the court.
The appointed person is called as official assignee, where The Presidency Towns Insolvency Act 1909 is applicable or where the Provincial Insolvency Act 1920 is applicable the appointed person is called as official receiver.
Whether a insolvent is able to open a bank account in his name ?
The bank should not allow to open a bank account in the name of insolvent and the bank also should not be grant any loan in the name of insolvent.
What happen if the insolvent is the existing account holder of the bank ?
As soon as the bank came to know that the customer has declared insolvent than the bank has to stop the operation in insolvent’s account and a new account should be open in the name of official receiver and the credit balance lying in the insolvent’s account should be disposed off as per the instructions of official receiver.
Can a minor or lunatic person can be declare insolvent ?
As the minor and lunatic person cannot be capable to enter into any contract so they can not be declared as insolvent.

Executor or Administrator

The executor or the administrator come in the picture on the event of death of a person. If a person dying with a will is called testate. The will clearly indicates the name of the person who will to look after the property of the deceased person is called executor.
On the other side if a person dies without a will is called Intestate. In this case on the mutual understanding / agreement or by the court appoints a person to look after the property of the deceased person, shall be known as an administrator.
What are the powers of the executor or administrator ?
As per u/s 269 of Indian Succession Act 1925, the executor or administrator have the full power to dispose off the property, put the property as mortgage to take secured loan to full fill the immediate need of the property of the deceased person and may also be execute his powers to recover the debt.
What are the duties of an administrator or an executor?
It is the executor’s or the administrator’s responsibility to collect and distribute the assets and to pay any tax due and the expenses of the deceased person’s property.
What is the status of an executor / administrator ?
The status of an executor / administrator is as a person u/s 221 of Indian Succession Act .
What happen if the executor / administrator dies ?
On the death of an executor, If the will permits the powers are transfer to any surviving executor. otherwise a fresh probate has to be obtain.
In the case of the death of administrator a fresh administrator has been appointed by the court or by the mutual agreement.
What are the documents needed to open a bank account ?
The probate is the main document to open a bank account in the name of executor and the letter of administration is required if the bank account is being open in the name of administrator. The bank must be examine carefully the genuineness and all the aspects of the documents.

Liquidator, Receiver or Assignee

First of all we have to know the meaning of these legal words.
What is the meaning of Liquidator ?
A person who appoints to wind-up the liquidation process of a company is known as liquidator.
Who appoints the liquidator ?
By the share holders if the winding-up is general.
By the court if winding-up is compulsory.
What is the meaning of Receiver or Assignee ?
A person who is appointed by the court to manage the estate of a insolvent person is known as official receiver or official assignee.
Whether the bank account can be opened in their name ?
Yes, the bank can open the bank account in their name after obtaining the documents of their appointment.

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Hindu Undivided Family (HUF)

What is the meaning of HUF ?
HUF means Hindu Undivided Family, where the ownership, common possession enjoyed by the each member of the family. It can be ancestral property or ancestral business.
What are the communities how can form HUF ?
As per the Hindu Law only Hindu, Sikh and Jain communities can form the HUF.
What is the formation of HUF ?
The senior most member of the family is known as Karta and other members of the family known as Coparceners.
Who and how become the coparceners of HUF ?
Only the male member of the family are the coparceners of HUF and he has the right to join by birth or by adoption. What are the duties of Karta?
The Karta is the alone member of the family who is empowered to handle all the affairs of the HUF. The Karta has the power to incur debts, execute documents and pledge securities on behalf of family or family business. The Karta has no need to take consent of coparceners.
What happen if Karta dies, declare insolvent or become insane?
In the above mentioned situation any of the situation arise so the next senior member of the family has became the Karta.
Has the HUF business is a partnership company ?
No, HUF is not a partnership company and not govern under Indian Partnership Act.
Can a bank account be open in the name of HUF or loan can be granted in the name of HUF ?
Yes, A bank account can be open in the name of HUF. The bank has to obtain the HUF declaration form and the account can be open with the signature of the Karta with a seal of HUF as Karta. But in the case of grant loan in the name of HUF, the loan documents are executed by the Karta as a capacity of Karta and all the adult members of the family have to be sign in their personal capacity.
What happen if the coparcener is minor ?
If the coparcener is a minor so the guardian should be sign on his behalf and the bank must have to record the date of birth of all the minor coparcener’s because on obtaining majority the bank has to take compulsorily their consent. What happen is the documents are signed alone by the Karta ?
In this case the security of the HUF is liable. The Karta is personally liable and the shares of the coparcener’s is also liable but the coparcener’s are not liable personally.
Can any coparcener countermand (stop payment) the cheque issued by Karta ?
No, the coparcener cannot countermand (stop payment) the cheque issued by the Karta unless he has the authority to do so.
Whether the HUF dissolve if any coparcener dies ?
No, the HUF cannot be dissolve if any of its coparcener dies
Can a Woman be the Karta of HUF ?
At present the answer is Yes, But until January 2016, a woman could not be the Karta of HUF. But the Delhi High Court ruled in favour of a female being the Karta of a HUF in a landmark case.

Joint Account

What is a Joint Account ?
When an account is opened in two or more individuals that account is called as Joint Account.
What is the authenticity of a Joint Account?
The Joint Account can be opened to felicitate the operations governed under u/s 45 of India Contract Act 1872. How the balance in the Joint Account can be disposed off ?
The balance in Joint account can be disposed off as per the instructions of the Joint account holders.
Who can open and close the Joint account ?
A Joint account can be open by the all account holders together, similarly the the time of closure of Joint account, The request letter must be signed by all the Joint holder together.
How the bank allow to operate the Joint account ?
The Joint account can be operate in many ways like jointly by all, by all of then or survivor, by either or survivor, by former or survivor, by any or more of them.
Who can make stop payment of cheque in Joint account ?
Any of the account holder can make stop payment of the cheque or other operations.
What happen when a joint holder dies, became insolvent or insane ?
In the above mentioned case the operation of the account must be stopped and the credit outstanding balance in the account shall be payable as per the mandate of the account and if there is the debit balance in the account than the payment should be made as per the Clayton’s rule.
Is there any restrictions for numbers of joint holders in a joint account ?
No, there is no restriction for the number of joint holders a joint account but as the directives to RBI the bank should examine the purpose of opening the account, nature of business handled and other relevant aspects before opening the joint account.

Proprietorship company

The Proprietorship company is also known as a sole proprietorship company.
What is proprietorship company ?
A proprietorship company is basically an un-incorporated business which is owned and run by one individual.
What is the difference between proprietorship company and partnership company ?
A partnership company is a company which is owned by two or more persons, provided the limit of 10 partners for banking business and the limit of 50 partners for other business. On the other hand the Sole proprietorship company is a company which is owned by one and only one person.
What are the advantages to have a proprietorship company ?
The advantages to have a proprietorship company is as follows –
01) Entitled alone for all the profits.
02) Sole responsible for all the business’s debts, losses and liabilities
03) Easy to establish.
04) There is no limitation on the number of people employed.
05) Complete control as the owner.
What are the Disadvantages to have a Proprietorship company ?
01) Owners are fully liable.
02) The owner’s income will be impact If the debts of the business become overwhelming,
03) Self-employment taxes shall be apply to sole proprietorship company.
04) The continuity of the business of a proprietorship company has been come to an end on the death of the owner.
05) Raising capital in a proprietorship company is difficult.
What are the Characteristics of a proprietorship company ?
01) Single ownership
02) One-man control company. 03) No legal entity
04) Unlimited liability
05) No profit-sharing
06) No legal formalities. Which bank account can be opened in the name of proprietorship company ?
The bank have to open a Current Account for the proprietorship company.
What are the documents required to open a bank account for proprietorship firm?
To open a bank account in the name of Proprietorship company the following documents is required –
01) Aadhar Card.
02) PAN Card self as well as company.
03) Address proof of the registered office of the company.
04) Registration number if the company registered under SME.
05) GST registration number.
The owner should be sign with the company seal to all the documents in the capacity of proprietor.

Partnership Company

The section 4 of Indian Partnership Act 1932 is the law related to the partnership company.
What is the definition of a partnership as per law?
The law says that “A partnership is relationship between two or more partners who shall be agree to share the profits of the business carried on by jointly or any of them doing for all.
What is the main requirement to enter into partnership ?
The partnership deed is the main document to be required for a partnership.
What is a partnership deed ?
A partnership deed is a document that the shows that the partners have a legal contract between them.
What is the nature of partnership deed ?
The partnership deed may be oral or written. may be registered or unregistered. Is there any difference between written or oral, registered or unregistered ?
If the agreement is in writing it is called partnership deed and the partnership deed is signed by all the partners and it should be registered in the court of law. On the other hand if the agreement is in oral form called as partnership agreement and it should be a oral agreement. The partnership agreement is signed by the majority of the partners and the partnership agreement is not need to be registered. What is the relationship between partners and firm ?
In Case of Partnership company the firm has no separate legal entity. The rights and liability of the partner’s are the rights and liability of the firm. The partners have both the status the principal and the agent.
What are the limit for numbers of partners ?
As per u/s 11 of Company Act provides that any firm engaged in banking business cannot have more than 10 partners or a firm have other business the partners should not exceed 20,failing this criteria the firm will be an illegal partnership. Can a minor be the partner of the partnership company?
Yes, as per Section 30 of The Indian Partnership Act, 1932 provides that a person who is a minor according to the law he is may not be a partner in a firm, but the minor can be become a partner with the consent of all the partners of the company and the minor may be admitted only for the benefits of partnership.
Whether the minor partner is also counted in number of partners ?
No, the minor will not be counted as partner because he is admitted to enjoy the benefits of the partnership.
Can HUF become a partner in a partnership company ?
As per the supreme court order a HUF can not be a partner of a partnership company.
What are the document required to open a bank account ?
The bank has to take the following documents-
01) copy of partnership deed
02) partnership declaration letter where deed is not present
03) bank account should be open in the name of company
04) account opening form should be signed by all partners except minors
05) operation of the account should be clearly indicate
What happen if any partner dies. retires or become insolvent ?
In these cases the bank have to stop operation of the account.
What happen if any partner become lunatic ?
In the case of lunacy of any partner does not dissolve the partnership unless the court order’s to do so.

Joint Stock Company

What is a Joint Stock Company ?
A joint-stock company is also known as the company of investor’s and the definition of a joint stock company is like this a business owned by its investors, with owning a share based on the amount of stock purchased.
What is the purpose to create Joint Stock Companies ?
The idea behind to create the Joint stock companies is in anticipation to provide easy finance to the company which can become too expensive for an individual or even for the government also. Which act gives recognition to the Joint Stock Companies ?
The Indian Companies Act 1956 is recognizing the Joint Stock Company and also gives the status of a legal entity.
How many types of Joint stock Companies ?
There are so many different types of Joint Stock Companies but as for the bank concern the mainly three types of Joint Stock Companies.
01) Private Limited Company
02) Public Limited Company
03) Government Companies.
What is a Private limited company ?
01) Private limited company is a company whose name ends with the word ‘Private Limited’.
02) The limitation of the shareholders are minimum two and maximum fifty. The shares of the private limited company are distributed among the partners.
03) The private limited company have minimum two directors.
04) The private limited company must start their business after receiving the Certificate of Incorporation.
05) The shares of the private limited company are not quoted in the share market because there are restrictions on right of transfer the shares and the public are not invited to subscribe.
06) Minimum paid up capital of a private limited company must be one lakh. What is a Public limited Company ?
01) Public limited company is a company whose name ends with the word ‘ Limited’.
02) The limitation of the shareholders are minimum three and maximum no limit.
03) The minimum number shares holders are seven.
04) The public limited company can invite public to distribute their shares easily
05) The shares of the public limited company are quoted in the share market. 06) The public limited company must have abstained certificate of incorporation and certificate of commencement of business before start their business
07) The public limited have to hold statutory meeting and submit a report in this concern. 08) Minimum paid up capital of a private limited company must be five lakh. What is a Government Company ?
01) A company whose fifty one percent shares are with government
02) The government company is also known as ” A company with limited with shares”
03) Important documents the government company must have to start their business or to open a bank account
a) Memorandum of Association
b) Articles of Association
c) Certificate of Incorporation
d) Certificate of Commencement of Business
e) Resolution of the Board
While open a bank account the bank must have the copies of all the documents with operational instructions

Society & Club

What is a Society or a Club ?
A society or club is a group of individuals who continuously involved in the social contacts and promoting an organization which work with the motto of ‘No profit No loss basis” and also incorporated under the Cooperative Society Act.
Is there any difference between club & society ?
The clubs are small group of people with clearly defined their rules and labels.
On the other hand the Societies are the larger groups of people, that shares values.
Is the society or club gets its legal entity & when ?
The society or club gets its status as a legal entity only after the incorporation and authorized to enter into a valid contract in their own name.
What are the documents required to open a bank account ?
A bank account can be open in the name of club or society and the bank has to obtain the following documents –
01) copy of registration certificate
02) copy of bye-lows
03) copy of resolution passed by the managing committee regarding
a) opening or maintain bank account
b) mention the name of the authorized person/persons to operate the bank account.
c) the purpose of the loan is consistent with the object of the institute.
Can the bank grant loan to the club or society ?
The loan should be sanctioned within the borrowing capacity of the institute and the bank must be ensure that a resolution has also been passed by the managing committee to take loan. What happen if the authorized person dies ?
In case of death of the authorized person dies, the bank should stop the operation in the account till another authorized officer bearer is not selected.

Trust

What is a trust ?
Trust is a legal arrangement by which a person (known as trustee) holds the other’s property as a nominal owner for the good of one or more beneficiaries.
What is Trust according to the section 03 of Indian Trust Act 1882 ?
As per the section 03 of Indian Trust Act 1882, the trust is an obligation annexed to the ownership of property and to be build as per the confidence imposed in and accepted by the owner of the property. who is Author, Trustee & beneficiary in a trust ?
There are three different people found in a trust
01) The author of Trust
02) the organizer of the trust called Trustee
03) To whom the trustee will work, they are called beneficiary. What is Trust Deed ?
Trust Deed is a document by which aTrust is created. it is a very important document for creating a trust.
How many types of trusts are there ?
There are two types of trusts
01) Private Trust
02) Public Trust
Private Trust are governed by Indian Trust Act and the Public Trust are governed by Public Trust Act. What are the power of a Trustee ?
01) The trustee are not empowered to delegate their authority to any other person.
02) All the trustees must act jointly unless any provision made under the trust deed.
03) The trustee have no implied authority to borrow the money, unless the trustee may not authorizes to do so as per the trust deed.
04) It is not permitted that the cheques received in favour of trust are not to be credited to the trustee’s personal account / overdraft account. What happen if the trustee dies ?
In the case of the death of a trustee the powers may be delegate to the other trustees If the trust deed permits then the power delegates to the other trustees otherwise court permission must be obtain What are the documents required to open a bank account in the name of trust ?
The bank must be obtain the following documents –
01) A certified true copy of the Trust Deed
02) Copy of resolution passed by the trustee
03) If the trust is a public trust the bank must be obtain the certificate of registration of charity commission.
04) The bank must have to take an undertaking from the trust on a stamped paper to indemnify the bank against the proceedings and any actionable claims.

Cooperative Society

What is Cooperative Society ?
A cooperative society is “an autonomous association of persons who united voluntarily to meet their common economic, social, and cultural needs.
what is the difference between society and cooperative society ?
Society is a group of people living together in the same geographical location but the Cooperative society is a group of people,

  • who are not only living together in the same geographical location,
  • having agreement for cooperation within themselves

Can the bank open an account of the cooperative society ?
Yes, the bank can open a bank account of the cooperative society only after seeking the permission from Registrar of cooperative society.
Can the cooperative bank open their bank account in a private bank ?
No, the cooperative bank can only be open their bank account in a cooperative bank or a commercial bank.

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Agent & Attorney

What is an Agent & Attorney ?
Agent or Attorney is an individual / company who is empower to take action on behalf of someone else.
Which of the document empowers the agent or attorney ?
The name of the document which empowers the agent or attorney is called Power of Attorney (POA).
Is the POA a legal document ?
Yes, the POA is a legal document.
How many parties involve in POA ?
There are two parties involve in POA
01) Principal
02) Agent / Attorney What is the difference between General Power of Attorney (GPOA) and Special Power of Attorney (SPOA) ? General power of attorney (GPOA) provides a vast area to make decision by an agent. The agent can be authorize to make decision on legal decisions, financial or medical action.
A special power of attorney (SPOA) gives a narrow choice of action. The SPOA issued for a specific action only. The agent/attorney can make decision in the authorized area only. Can the power of attorney be registered?
As per the Indian Registration Act There are so many documents which need not to be register and the Power of Attorney (POA) is one of them. However, the Supreme court has recently ruled that a Power of Attorney given to sell of an immovable properties should be registered. Can the Agency or Power of Attorney be terminated ?
Yes, the agency or Power of Attorney can be terminated u/s 201 of Indian Contracts Act.

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Mental Exercise

If you are here it means you have read the complete blog so it’s time check your mental skills
01) As per u/s 3 of Indian Majority Act who is a minor?
02) An account of a minor aged 17 years and by the oversight of the bank an overdraft has been created in the minor’s account and the minor is not repaying the amount, all of a sudden one Fixed Deposit has come for encashment in his name. Can Bank adjust the overdraft amount with the FD amount?
03) The provision for maximum numbers of partner in a firm is mentioned in which of the act ?
04) How will to measure the liability of a deceased partner ?
05) Can a minor be a partner in a partnership company ?
06) Is there any limit for the number of shareholders in a Public limited company ?
07) HUF is governed by which Act?
08) How does one become a member of a HUF?
09) Which Of the Document required by the bank to open the Trust Account?
10) A Charitable Trust must be registered with ?
11) The rights of a Hindu Married Woman are governed by which law?

Thank you for answer these questions

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