Company Accounts 🏢

Definition: A Company is a legal person created by law (Companies Act, 2013), separate from its members.

Documents Required 📄

To open a company account, bank needs:

1. Certificate of Incorporation: Birth certificate of company.
2. Memorandum of Association (MOA): Defines company's powers (Constitution).
3. Articles of Association (AOA): Internal rules and regulations.
4. Certificate of Commencement of Business: (Only for Public Limited Companies).
5. Board Resolution: The most important document!
6. List of Directors: With their KYC.
7. PAN of Company.

The Board Resolution 📜

A certified copy of the resolution passed by the Board of Directors authorizing:

1. Opening of the bank account.
2. Who will operate the account (Authorized Signatories).
   • E.g., "Any two Directors jointly" or "Managing Director singly".
3. Authority to borrow (if needed).

Why crucial? A company cannot walk into a bank. It acts through its Board. The Resolution is the proof of Board's decision.

Operations & Rules ⚖️

1. Cheques ✍️

• Must be signed by authorized signatories "For and on behalf of [Company Name]".
• If they sign without company stamp, they might be personally liable.

2. Borrowing Powers 💰

• Bank must check MOA to see if company is authorized to borrow.
• Ultra Vires: If company borrows beyond its powers, the loan is void (Bank cannot recover!).

3. Change of Directors 🔄

• If a director resigns/dies, the account operations DO NOT STOP (Company has perpetual succession).
• However, if that director was a signatory, Board must pass new resolution appointing new signatory.

4. Winding Up 🛑

• If court orders winding up or liquidator appointed:
• Directors' powers cease.
• Liquidator takes over the account.

Quiz Time! 🎯

💡 Final Wisdom: "A company never dies (unless wound up). Directors come and go, but the bank account goes on!" 🏢♾️

Next up: Club & Society Accounts - Non-profit banking! 🤝