Background
For opening a Bank Account of a company, an authority of the Board of Directors is required. This authority is granted by passing a resolution in the meeting of the Board of Directors. During the meeting, the Board approves the bank in which account needs to be opened, who shall be the signatory for the said account, the limits, whether the account is to be operated singly by any one director or jointly by 2 or more directors, etc.
Documentation and validation of the Board Resolution
Merely passing a resolution is not sufficient, it requires documentation and validation before submitting the same to the Bank. Since the account is opened in the name of the company, the following requirements shall be fulfilled, before submitting the resolution to the concerned Bank:
- The resolution should be on the letterhead of the company.
- The date of the meeting, type of meeting at which the resolution is passed should be mentioned in the resolution
- The resolution must be signed by the Chairperson or Director or any other person authorised for the same.
- The name of the Bank, its Branch should be properly mentioned.
- Signatories and their account limits should be available in the resolution.
- Any other information as may be requested by the Bank.
Banks do provide the Draft Formats of Board Resolution for Opening or Closing of Bank account, Change in Signatories etc. So you may approach the Bank for draft formats.
Below is the draft format of Board Resolution for the opening of Bank Account
Certified True Copy of the Board Resolution passed at the meeting of Board of Directors of _______________ (Name of the Company) held on ___________ (Day and Date of the meeting) at _________________ (place of the meeting) at ___________ AM/PM (time of the meeting)
The Chairperson informed the Board that for managing day-to-day financial operations of the company, it is proposed to open a current account with __________ (Bank Name and Branch) and is necessary to grant authority to the concerned signatories of the company to operate the said Bank account. The Board discussed the matter and the following resolution was passed:
“RESOLVED THAT Current Account in the name and style of (Name of The Company) be opened with the (Bank Name and Address), for operations of the activities of the Company”
“RESOLVED FURTHER THAT the said Bank be and is hereby instructed to honour all cheques, Bills of exchange, Promissory Notes, Demand Drafts and any other instruments drawn, accepted, deposited or signed on behalf of the company, by the following authorised signatories up to the limits prescribed below:
“RESOLVED FURTHER THAT the company hereby apply for “Corporate Internet Banking Facility” of the said Bank and authorise following officers of the company to operate the said Current Account through “Corporate Internet Banking Facility”
“RESOLVED FURTHER THAT Mr. _______________, Managing Director/Director of the Company be and is hereby authorised to sign all such documents, papers, applications, Forms etc. as may be required by the Bank in connection with the opening of the said Bank Account and furnish the same along with the copy of Memorandum and Articles of Association of the Company to the Bank.”
“RESOLVED FURTHER THAT the copy of the foregoing resolution be submitted to the Bank and shall remain in force until duly rescinded and notice in writing is given by the Director(s) of the Company.”
Board Resolution for closure of Bank account
Certified True Copy of the Board Resolution passed at the meeting of Board of Directors of _______________ (Name of the Company) held on ___________ (Day and Date of the meeting) at _________________ (place of the meeting) at ___________ AM/PM (time of the meeting)
The Chairperson informed the Board that it is proposed to close the current account maintained by the company ________________ with __________________ (Bank name and Branch). The Board discussed the matter and following resolution was passed:
“RESOLVED THAT the consent of the Board be and is hereby accorded to close the Current Account bearing number ______________ maintained with ___________________ (Bank Name and Branch) and the said Bank is hereby instructed to return the amount lying in the said Bank Account to the company by way of issuing banker’s cheque or transfer to the other current account of the company bearing number _______________ (Account Number) maintained with _____________ (Bank Name and Branch).”
“RESOLVED FURTHER THAT Mr. _____________ (Name of the Director), Director of the Company be and is hereby authorised to do all such acts, deeds and thighs as may necessary and sign all such documents, papers, applications, forms etc. as may be necessary and required by the Bank for closure of the said Bank Account.”
“RESOLVED FURTHER THAT certified true copy of the foregoing resolution be submitted to the Bank for their record and perusal.”
Disclaimer
The resolution samples are for reference purposes only. Please refer to relevant provisions of the Act, Rules and any other applicable laws before finalisation.
The information given on this site is based on my understanding and knowledge on the subject and does not constitute legal opinion or advice to the users. All information is provided in good faith, to create awareness of legal provisions, compliance and procedures and are solely for knowledge sharing purpose. however, we make no representation of any kind, express or implied, regarding the accuracy, adequacy and completeness of any information on site all the time. Hence you are advised to opt for professional advice before acting on the information provided herein.
