TYPES OF ACCOUNTS AND TYPES OF ACCOUNTS AND BANKING SERVICESBANKING SERVICES

Procedures for opening an accountProcedures for opening an accountREFERENCES: It is in the interest of the bank to REFERENCES: It is in the interest of the bank to obtain satisfactory information about the stranger obtain satisfactory information about the stranger before accepting him as a customer. References before accepting him as a customer. References may also be referred to as Letters of Introduction may also be referred to as Letters of Introduction (LOI). References are obtained due to the following (LOI). References are obtained due to the following factors;factors; IDENTITY: The identity of the new customer needs IDENTITY: The identity of the new customer needs to be confirmed to ensure that the customer has not to be confirmed to ensure that the customer has not assumed a false name for the purpose of obtaining assumed a false name for the purpose of obtaining payment through the bank of a stolen crossed payment through the bank of a stolen crossed cheques.cheques.

CHARACTER; The bank needs to confirm CHARACTER; The bank needs to confirm that the character of the person is good and that the character of the person is good and would be a satisfactory customer and also would be a satisfactory customer and also has the ability to operate an account.has the ability to operate an account.

MEANS OF LIVELIHOOD/EMPLOYMENT; MEANS OF LIVELIHOOD/EMPLOYMENT; The bank needs to know the employer of the The bank needs to know the employer of the customer to forestall the payment of customer to forestall the payment of cheques by the bank payable to his cheques by the bank payable to his employer and endorsed to the customer or employer and endorsed to the customer or drawn by his employer in favour of a third drawn by his employer in favour of a third party and similarly endorsed.party and similarly endorsed.

SOURCES OF OBTAINING REFERENCESSOURCES OF OBTAINING REFERENCES1.The customer’s employer1.The customer’s employer2. An existing customer of the same bank2. An existing customer of the same bank3.A referee3.A referee4. The customers lawyers or auditors 4. The customers lawyers or auditors

(corporate entities)(corporate entities)5. The customer’s bankers (corporate entities)5. The customer’s bankers (corporate entities)In Ladbroke V Todd (1914) a bank was found In Ladbroke V Todd (1914) a bank was found

guilty of conversion, having collected guilty of conversion, having collected cheques for a new unknown customer cheques for a new unknown customer without taking up a reference.without taking up a reference.

In Hampstead Guardians V Barclays Bank In Hampstead Guardians V Barclays Bank Limited (1923) excellent references were Limited (1923) excellent references were received from a stranger (whom it transpired received from a stranger (whom it transpired was the customer himself). The bank was was the customer himself). The bank was held to have been negligent by not having held to have been negligent by not having made adequate enquiriesmade adequate enquiries

IDENTIFICATION; Some banks prefer IDENTIFICATION; Some banks prefer asking their prospective customers to show asking their prospective customers to show identification (passport, driving license, identification (passport, driving license, voters ID, employers ID). The bank then voters ID, employers ID). The bank then goes ahead to make its own verification. goes ahead to make its own verification. The customer is asked to produce passport The customer is asked to produce passport size pictures.size pictures.

ADDRESS VERIFICATION; Banks usually ADDRESS VERIFICATION; Banks usually request prospective customers to provide request prospective customers to provide recent utility bills in customers name or the recent utility bills in customers name or the owner of the resident.owner of the resident.

APPLICATION/ACCOUNT APPLICATION/ACCOUNT OPENING FORM.OPENING FORM.

Standard forms are provided by the banks and Standard forms are provided by the banks and fully completed by prospective customers. The fully completed by prospective customers. The following items are usually found on the form.following items are usually found on the form.

1. Full name and address of the account holder1. Full name and address of the account holder 2. Residential address2. Residential address 3. Telephone numbers (office and residential)3. Telephone numbers (office and residential) 4. Occupation/ Nature of business of account 4. Occupation/ Nature of business of account

holder. In the case of married women they are holder. In the case of married women they are requested to provide the name and place of work requested to provide the name and place of work of their husband.of their husband.

In E.B. Savorty & Co V Lloyds Bank Ltd., a In E.B. Savorty & Co V Lloyds Bank Ltd., a dishonest clerk paid in stolen cheques to his wife’s dishonest clerk paid in stolen cheques to his wife’s account. As the bank had not enquired as to her account. As the bank had not enquired as to her husband’s occupation when his wife’s account husband’s occupation when his wife’s account was opened, it was held to have been at fault. As was opened, it was held to have been at fault. As a result of this, some banks ask for the occupation a result of this, some banks ask for the occupation of all account holders.of all account holders.

However, some banks do not ask of occupation However, some banks do not ask of occupation details. This is because of the ruling in the case of details. This is because of the ruling in the case of Orbit Mining and Trading Company Ltd. V Orbit Mining and Trading Company Ltd. V Westminster Bank Ltd. (1963), in which it was Westminster Bank Ltd. (1963), in which it was stated that a bank should not be expected to keep stated that a bank should not be expected to keep up to date information as to a customer’s up to date information as to a customer’s employment. This bank obviously feel that the risk employment. This bank obviously feel that the risk element is quite negligible element is quite negligible

5. Nationality and date of birth (personal 5. Nationality and date of birth (personal customers)customers)

6. Date of incorporation/ company registered 6. Date of incorporation/ company registered numbernumber

7. Monthly/Annual income7. Monthly/Annual income

OTHER STEPS TAKEN WHEN OTHER STEPS TAKEN WHEN OPENING BANK ACOUNTOPENING BANK ACOUNT

A specimen signature card on the banks standard A specimen signature card on the banks standard signature card is obtained from the customers.signature card is obtained from the customers.

Issue paying-in bookIssue paying-in book Note frequency for the dispatch of statements as Note frequency for the dispatch of statements as

requested by the customer.requested by the customer. Arrange for the issue of cash dispense and credit Arrange for the issue of cash dispense and credit

cards if required.cards if required. In the case of interest bearing accounts, the In the case of interest bearing accounts, the

current rate of interest should be made known to current rate of interest should be made known to the customer. (bank charges, interest)the customer. (bank charges, interest)

Order cheques books, where applicable, but do Order cheques books, where applicable, but do not send them out to the customer until not send them out to the customer until satisfactory references have been received and satisfactory references have been received and there is a cleared credit balance on the account.there is a cleared credit balance on the account.

PERSONAL/INDIVIDUAL PERSONAL/INDIVIDUAL ACCOUNTACCOUNT

REQUIREMENTSREQUIREMENTS 1.Identification (passport, identity cards)1.Identification (passport, identity cards) 2.Reference/Letter of introduction2.Reference/Letter of introduction 3.Address verification3.Address verification 4.Complete application form4.Complete application form 5.Complete signature card5.Complete signature card

Death of a personal/individual account holderDeath of a personal/individual account holder The death of a customer terminates the bank’s The death of a customer terminates the bank’s

mandate once the bank receives notice of it. It is mandate once the bank receives notice of it. It is the receipt of notice, not the actual death, which the receipt of notice, not the actual death, which fixes the date of the mandates termination. The fixes the date of the mandates termination. The bank may take the following steps on receipts of bank may take the following steps on receipts of notice of death of a personal/individual account notice of death of a personal/individual account holder;holder;

1. Any credit balance or items held in safe custody 1. Any credit balance or items held in safe custody can be released to the estate’s executors or can be released to the estate’s executors or administrators after the production probate or administrators after the production probate or letters of administration (LA). However, where the letters of administration (LA). However, where the will is held in safe custody, it will be needed by the will is held in safe custody, it will be needed by the executors to obtain probate. This will be released executors to obtain probate. This will be released to the executors If they are known to the bank, or if to the executors If they are known to the bank, or if a satisfactory report is obtained from the solicitor a satisfactory report is obtained from the solicitor

Acting for the executors.Acting for the executors. 2.During the period between the bank receiving notice and 2.During the period between the bank receiving notice and

the granting of probate or LA, any credits received can the granting of probate or LA, any credits received can either be placed in a suspense account or in the accounts either be placed in a suspense account or in the accounts itself.itself.

3.Any matters that were in course prior to the customer’s 3.Any matters that were in course prior to the customer’s death e.g. purchase of stocks and shares can be death e.g. purchase of stocks and shares can be completed.completed.

4.If the deceased’s account was overdrawn at the time of 4.If the deceased’s account was overdrawn at the time of receipts of notice of death, the bank should claim in the receipts of notice of death, the bank should claim in the deceased’s estate for the full amount owing plus interest. It deceased’s estate for the full amount owing plus interest. It should also give details of security held.should also give details of security held.

5.Where the value of the estate is small, the credit balance 5.Where the value of the estate is small, the credit balance can be released to a closer relative provided thatcan be released to a closer relative provided that

A) The relative has been identifiedA) The relative has been identified B) The bank has had a satisfactory report on the relativeB) The bank has had a satisfactory report on the relative C) The bank has seen the death certificateC) The bank has seen the death certificate

Mental Incapacity of a personal/individual Mental Incapacity of a personal/individual account holderaccount holder

It terminates the mandateIt terminates the mandate No further cheques are paid until the appointment No further cheques are paid until the appointment

of a receiver by the courts and has presented this of a receiver by the courts and has presented this authority to the banksauthority to the banks

The receiver takes over the assets of the mentally The receiver takes over the assets of the mentally incapacitated customer, open an account at the incapacitated customer, open an account at the same branch.same branch.

The receiver cannot borrow unless authorized by The receiver cannot borrow unless authorized by the court to do so.the court to do so.

The authority of the receiver ceases upon the The authority of the receiver ceases upon the death of the mentally incapacitated customer.death of the mentally incapacitated customer.

The executors or administrators then The executors or administrators then take over.take over.

The bank can allow the operation of the The bank can allow the operation of the account without the appointment of a account without the appointment of a receiver.receiver.

The bank is sometimes prepared to allow a The bank is sometimes prepared to allow a close relative to operate the account where close relative to operate the account where the money will be used for necessities like the money will be used for necessities like food, clothing lodging and medication.food, clothing lodging and medication.

This will only be agreed to where the relative This will only be agreed to where the relative is considered to be trustworthy and is is considered to be trustworthy and is prepared to provide the bank with a suitable prepared to provide the bank with a suitable indemnity.indemnity.

JOINT ACCOUNTJOINT ACCOUNT Is an effective arrangement where two or more Is an effective arrangement where two or more

individuals, operate a bank account in the name of individuals, operate a bank account in the name of joint account holders. The most common form is joint account holders. The most common form is that of husband and wife.that of husband and wife.

REQUIREMENTSREQUIREMENTS 1.Identification(passport, identity card)1.Identification(passport, identity card) 2.Reference/Letter of Introduction2.Reference/Letter of Introduction 3.Address verification3.Address verification 4.Complete application form for joint holders4.Complete application form for joint holders 5.Complete signature card for joint account 5.Complete signature card for joint account

holders. This will state how many signaturesholders. This will state how many signatures are needed to activate instructions on the accountare needed to activate instructions on the account

The mandate taken will include a joint and The mandate taken will include a joint and several liability clauses. By the terms of this several liability clauses. By the terms of this mandate, the joint account holders agree to mandate, the joint account holders agree to be jointly and severally liable to the bank for be jointly and severally liable to the bank for any liability that they may incur to the bank. any liability that they may incur to the bank. The bank may claim from both holders The bank may claim from both holders together or from one or other of themtogether or from one or other of them

Death of a joint account holderDeath of a joint account holder The mandate should be clear on the ‘’right The mandate should be clear on the ‘’right

of survivorship’’. This is the issue of paying of survivorship’’. This is the issue of paying any existing balance to the survivor in case any existing balance to the survivor in case of death of one of the parties.of death of one of the parties.

Otherwise, death terminates the mandate Otherwise, death terminates the mandate and the bank would have to seek further and the bank would have to seek further instructions from the deceased persons instructions from the deceased persons personal representative as to how to deal personal representative as to how to deal with the deceased’s share of the funds.with the deceased’s share of the funds.

Steps to take on notice of death of a joint Steps to take on notice of death of a joint account holder.account holder.

1.If a joint account is in credit, it can continue. The 1.If a joint account is in credit, it can continue. The survivor will be able to continue to use the balance survivor will be able to continue to use the balance of the account without having to wait for probate or of the account without having to wait for probate or LA to be obtained.LA to be obtained.

2.If cheques are presented drawn on a joint 2.If cheques are presented drawn on a joint account, signed by the deceased, they should be account, signed by the deceased, they should be returned marked ‘’Drawer deceased, unless the returned marked ‘’Drawer deceased, unless the surviving account holder is willing to authorize surviving account holder is willing to authorize payment.payment.

3.If the account is overdrawn when the death 3.If the account is overdrawn when the death occurred, the account should be stopped if the occurred, the account should be stopped if the bank wishes to retain its claim against the bank wishes to retain its claim against the deceased’s estate.deceased’s estate.

4. If an overdrawn joint account is stopped 4. If an overdrawn joint account is stopped to preserve the bank’s claim, arrangements to preserve the bank’s claim, arrangements should be made with the survivor for a new should be made with the survivor for a new account to be opened in the survivors name.account to be opened in the survivors name.

5. Where items are held in safe custody in 5. Where items are held in safe custody in joint names, banks will require a receipt joint names, banks will require a receipt from the survivor and also the executor or from the survivor and also the executor or administrator of the deceased. This is administrator of the deceased. This is because these items may not be jointly because these items may not be jointly owned e.g. jewellery.owned e.g. jewellery.

Mental incapacity of a joint account holderMental incapacity of a joint account holder If it becomes apparent that a joint account holder If it becomes apparent that a joint account holder

is mentally incapacitated, then the bank mandate is mentally incapacitated, then the bank mandate should be cancelled and no further cheques paid should be cancelled and no further cheques paid until a receiver has been appointed by the courts.until a receiver has been appointed by the courts.

The receiver will act in conjunction with the sane The receiver will act in conjunction with the sane joint account holder.joint account holder.

In exceptionally cases, where a joint account is In exceptionally cases, where a joint account is overdrawn and one party becomes mentally overdrawn and one party becomes mentally incapacitated, a bank may decide to release the incapacitated, a bank may decide to release the mentally incapacitated customer’s estate from mentally incapacitated customer’s estate from liability and allow the account to be operated by liability and allow the account to be operated by the sane party, who would be liable for all future the sane party, who would be liable for all future borrowings.borrowings.

MINOR ACCOUNTMINOR ACCOUNT Minors are not liable for contracts that they Minors are not liable for contracts that they

enter into unless they are for the purchase enter into unless they are for the purchase of necessities, contracts of service, vocation of necessities, contracts of service, vocation etc.etc.

However, on attaining the age of majority, a However, on attaining the age of majority, a minor can ratify an otherwise unenforceable minor can ratify an otherwise unenforceable contract.contract.

Children under the age of (7) may have Children under the age of (7) may have accounts operated in their names but accounts operated in their names but operated on their behalf by their parents or operated on their behalf by their parents or guardians as their trusteeguardians as their trustee

After they have obtained a reasonable age After they have obtained a reasonable age but still under minority, they are usually but still under minority, they are usually permitted to operate the accounts personally permitted to operate the accounts personally provided the balances on their accounts provided the balances on their accounts always remain in credit.always remain in credit.

The guardian or parents of the minor will The guardian or parents of the minor will satisfy requirements as in personal customer.satisfy requirements as in personal customer.

The minor may not provide proof of The minor may not provide proof of identification and address, however, the bank identification and address, however, the bank must obtain a copy of the minors’ birth must obtain a copy of the minors’ birth certificate.certificate.

REQUIREMENTSREQUIREMENTS 1. The parents or guardian of the minor will 1. The parents or guardian of the minor will

satisfy requirement as in personal satisfy requirement as in personal customers.customers.

2. The minor may not provide proof of 2. The minor may not provide proof of identification and address, however the identification and address, however the bank must obtain a copy of the minor/s birth bank must obtain a copy of the minor/s birth certificate.certificate.

3.Banks do not usually issue cheque 3.Banks do not usually issue cheque guarantee cards to minors since it is guarantee cards to minors since it is doubtful whether the guarantee contract doubtful whether the guarantee contract relating to the use of the card is binding on relating to the use of the card is binding on the minor.the minor.

However, cash dispenser cards or However, cash dispenser cards or Automated Teller Machine cards are given Automated Teller Machine cards are given to minors since they are legally a means for to minors since they are legally a means for the minor to access his own funds.the minor to access his own funds.

Other important points concerning minors.Other important points concerning minors. Provided an account holder has full contractual Provided an account holder has full contractual

capacity, a minor can act as that person’s agent capacity, a minor can act as that person’s agent on that account.on that account.

A minor can be a director of a limited liability A minor can be a director of a limited liability company provided the articles allow this.company provided the articles allow this.

A minor cannot act as a trustee or an executor.A minor cannot act as a trustee or an executor. A minor cannot make a valid will unless he is on A minor cannot make a valid will unless he is on

active service with the armed forces (in case of an active service with the armed forces (in case of an emergency).emergency).

A minor cannot give an enforceable guarantee, A minor cannot give an enforceable guarantee, although he could ratify such a guarantee upon although he could ratify such a guarantee upon attaining the age of maturity.attaining the age of maturity.

PARTNERSHIP ACCOUNTPARTNERSHIP ACCOUNT A partnership is a relationship that takes A partnership is a relationship that takes

place between persons carrying on the place between persons carrying on the business in common with a view to make business in common with a view to make profit.profit.

Professionals like doctors, lawyers, Professionals like doctors, lawyers, engineers, architects are some of the engineers, architects are some of the common groups that form partnership with common groups that form partnership with any number of individuals.any number of individuals.

Any partner may cancel the mandate as well Any partner may cancel the mandate as well as stop the payment of a cheque even as stop the payment of a cheque even though he or she did not sign it.though he or she did not sign it.

DEATH OF A PARTNERDEATH OF A PARTNER On the death of a partner, if the partnership On the death of a partner, if the partnership

continues in business, the remaining continues in business, the remaining partners should sign fresh mandate forms.partners should sign fresh mandate forms.

If the partnership account is overdrawn upon If the partnership account is overdrawn upon the death of a partner and the bank wishes the death of a partner and the bank wishes to preserve its rights against the deceased’s to preserve its rights against the deceased’s estate, it should stop the account and lodge estate, it should stop the account and lodge a claim in the estate.a claim in the estate.

Retirement of a partner; A retiring partner Retirement of a partner; A retiring partner must give due notice of retirement to gain must give due notice of retirement to gain release from liability for partnership debts release from liability for partnership debts after he or she has retired.after he or she has retired.

Where the partnership account is overdrawn Where the partnership account is overdrawn at the time the partner wishes to retire, the at the time the partner wishes to retire, the bank should stop the account to prevent the bank should stop the account to prevent the rule in Clayton’s case operating against it if rule in Clayton’s case operating against it if it wishes to preserve its right against the it wishes to preserve its right against the retiring partner .retiring partner .

The remaining partners should then open a The remaining partners should then open a new account.new account.

A retiring partner can only be released from A retiring partner can only be released from liability for partnership debts incurred prior to liability for partnership debts incurred prior to his or her retirement if the firm’s creditors his or her retirement if the firm’s creditors agree to accept the new partnership as the agree to accept the new partnership as the debtor in substitution.debtor in substitution.

MENTAL INCAPACITY OF A PARTNERMENTAL INCAPACITY OF A PARTNER This does not automatically dissolved the This does not automatically dissolved the

partnership. The partners may, however, partnership. The partners may, however, apply to the court for its dissolution.apply to the court for its dissolution.

If the partnership account is overdrawn, and If the partnership account is overdrawn, and the bank wishes to preserve its rights the bank wishes to preserve its rights against the estate of the mentally against the estate of the mentally incapacitated partner it should stop the incapacitated partner it should stop the account, otherwise the rule in Clayton’s account, otherwise the rule in Clayton’s case apply.case apply.

ADMISSION OF A NEW PARTNERADMISSION OF A NEW PARTNER When a new partner joins the firm it is necessary When a new partner joins the firm it is necessary

to establish whether he or she will accept liabilities to establish whether he or she will accept liabilities incurred by the partnership prior to the incurred by the partnership prior to the appointment, or not.appointment, or not.

If he or she will not accept liability, the old If he or she will not accept liability, the old partnership account may be stopped and a new partnership account may be stopped and a new account opened for the new partnership.account opened for the new partnership.

Alternatively, the bank may decide to allow the old Alternatively, the bank may decide to allow the old partners to continue, as the operation of the rule in partners to continue, as the operation of the rule in Clayton’s case will mean that any debt incurred by Clayton’s case will mean that any debt incurred by the old partnership will be repaid and any further the old partnership will be repaid and any further borrowing will be monies drawn by the new firm borrowing will be monies drawn by the new firm upon which the new partner will be liable.upon which the new partner will be liable.

SECURITY OF A PARTNERSHIPSECURITY OF A PARTNERSHIP All the partners are required to sign the bank’s All the partners are required to sign the bank’s

charge forms when giving a charge over the charge forms when giving a charge over the partnership property.partnership property.

A clause in the form will state that the security A clause in the form will state that the security remains good despite any change in the remains good despite any change in the constitution of the firm, such as the appointment of constitution of the firm, such as the appointment of a new partner.a new partner.

Where only one partner executes a legal mortgage Where only one partner executes a legal mortgage over partnership property without authority, this over partnership property without authority, this may constitute an equitable charge, but difficulties may constitute an equitable charge, but difficulties are likely to arise with the realization, particularly if are likely to arise with the realization, particularly if there is a partnership dispute.there is a partnership dispute.

COMPANY ACCOUNTSCOMPANY ACCOUNTS A company is a corporation, that is, an A company is a corporation, that is, an

association of one or more persons called association of one or more persons called shareholders formed for the purpose of shareholders formed for the purpose of carrying on any business that has for its carrying on any business that has for its object or aim the acquisition of gain or profit.object or aim the acquisition of gain or profit.

It is a legal entity with the power to own It is a legal entity with the power to own property, open bank accounts, to borrow, to property, open bank accounts, to borrow, to enter into contracts and to sue and be sued.enter into contracts and to sue and be sued.

All companies in Ghana are registered All companies in Ghana are registered under the Companies Code 1963.under the Companies Code 1963.

REQUIREMENTSREQUIREMENTS 1.Identification of all the directors (passport, 1.Identification of all the directors (passport,

ID).ID). 2.Reference/ Letter of Introduction2.Reference/ Letter of Introduction 3.Address verification3.Address verification 4. Certificate of Incorporation4. Certificate of Incorporation 5.Company Regulation5.Company Regulation 6. Certificate to Commence Business6. Certificate to Commence Business 7.Complete application form on Bank’s 7.Complete application form on Bank’s

standard form for companies.standard form for companies.

8. A resolution appointing the bank as 8. A resolution appointing the bank as bankers and give names of officials who will bankers and give names of officials who will act on behalf of the company together with act on behalf of the company together with detailed instructions for the signing of detailed instructions for the signing of cheques and the deposit and withdrawal of cheques and the deposit and withdrawal of security and safe custody items. The security and safe custody items. The resolution should be signed by the resolution should be signed by the Chairman of the meeting and countersigned Chairman of the meeting and countersigned by the Secretary.by the Secretary.

9. Complete signature card i.e. specimen 9. Complete signature card i.e. specimen signatures of all signing officers.signatures of all signing officers.

10. Latest accounts or business plans or 10. Latest accounts or business plans or statement or of business affairs.statement or of business affairs.

MEMORANDUM OF ASSOCIATION: This is a MEMORANDUM OF ASSOCIATION: This is a statement of the powers and constitution of the statement of the powers and constitution of the company and it contains six major clausescompany and it contains six major clauses

1.A statement quoting the full name of the 1.A statement quoting the full name of the company.company.

2. Details of the company’s registered office2. Details of the company’s registered office 3. A clause itemising the powers and objects of 3. A clause itemising the powers and objects of

the company.the company. 4. A statement that the liability of the members is 4. A statement that the liability of the members is

limited to the amount on the unpaid shares.limited to the amount on the unpaid shares. 5.A statement of the maximum amount of share 5.A statement of the maximum amount of share

capital that the company can currently issue.capital that the company can currently issue. 6. The association clause which gives detail of the 6. The association clause which gives detail of the

original shareholders.original shareholders.

ARTICLES OF ASSOCIATION: These cover the ARTICLES OF ASSOCIATION: These cover the following matters.following matters.

1. The powers of the directors1. The powers of the directors 2. The issue and transfer of shares2. The issue and transfer of shares 3. The right of the shareholders3. The right of the shareholders 4. The conduct of meetings4. The conduct of meetings 5.The appointment of directors5.The appointment of directors 6. The retirement of directors6. The retirement of directors 7. The disqualification and removal of directors7. The disqualification and removal of directors 8. The accounts of the company8. The accounts of the company 9. The winding up of the company9. The winding up of the company

DEATH OF A DIRECTOR OF A COMPANYDEATH OF A DIRECTOR OF A COMPANY It has a minimal effect of the operation of the It has a minimal effect of the operation of the

company’s bank account.company’s bank account. Cheques could still be paid after the death Cheques could still be paid after the death

of the director.of the director. The bank will normally refer to the mandate The bank will normally refer to the mandate

to find out about any action to be taken to find out about any action to be taken regarding the future of the account.regarding the future of the account.

With a private company with two directors, With a private company with two directors, when one dies, the company regulations will when one dies, the company regulations will contain instructions concerning the contain instructions concerning the appointment of a new director.appointment of a new director.

Where both directors die, their personal Where both directors die, their personal representative would have to apply to the representative would have to apply to the courts to be appointed as shareholders and courts to be appointed as shareholders and for the appointment of new directors.for the appointment of new directors.

TRUSTEE ACCOUNT; A trustee is a person TRUSTEE ACCOUNT; A trustee is a person who deals with property for the benefit of who deals with property for the benefit of persons, of whom he may himself be one.persons, of whom he may himself be one.

REQUIREMENTSREQUIREMENTS 1.Identification of the trustees (passport, ID)1.Identification of the trustees (passport, ID) 2.Reference/Letter of Introduction2.Reference/Letter of Introduction 3.Address Verification3.Address Verification 4.Complete application form for trustees4.Complete application form for trustees 5.Complete signature card5.Complete signature card

RULES REGARDING TRUSTEE RULES REGARDING TRUSTEE ACCOUNTACCOUNT

1.Trustees are not allowed to delegate.1.Trustees are not allowed to delegate. 2. A trustee does not have the implied 2. A trustee does not have the implied

powers to borrow or use trust property as a powers to borrow or use trust property as a security for a loan if the terms of the trust do security for a loan if the terms of the trust do not provide for this.not provide for this.

3. A trustee would have to admit joint and 3. A trustee would have to admit joint and several liability if he/she wants to borrow. several liability if he/she wants to borrow. This will enable the bank to transfer any This will enable the bank to transfer any credit balances on his accounts to reduce a credit balances on his accounts to reduce a debit balance on the trust accountdebit balance on the trust account

4. A bank should not allow a trustee to draw 4. A bank should not allow a trustee to draw a cheque on the trust account to hi/her a cheque on the trust account to hi/her personal overdrawn account. The bank will personal overdrawn account. The bank will be held liable for negligence facilitating be held liable for negligence facilitating breach of trust.breach of trust.

DEATH OF A TRUSTEEDEATH OF A TRUSTEE 1.Upon the death of a trustee, the surviving 1.Upon the death of a trustee, the surviving

trustees can continue to operate the trustees can continue to operate the account. However, the trust deed must be account. However, the trust deed must be examined to find out if a replacement trustee examined to find out if a replacement trustee should be appointed.should be appointed.

2.Where a trustee dies and there are no 2.Where a trustee dies and there are no replacement, the personal representatives replacement, the personal representatives can take over till a new trustee is appointed.can take over till a new trustee is appointed.