Problem while applying for bank account for NGO
8 months ago
Dear Sir,
Earlier, We had the same person as president and founder of our NGO. Because of some differences he resigned and we elected a new president by majority vote of registered members and position holders. Now when we go to bank to apply for a dedicated account for the trust they say that you cannot do it because your founder and president has resigned so your organisation stands dissolved, you need to reregister your NGO.
Kindly help us with this problem.
A.Dear Client,
A trustee cannot resign without the permission of the court unless the trust instrument so provides or unless all of the beneficiaries who are legally capable to do so consent to the resignation. The court usually permits the trustee to resign if continuing to serve will be an unreasonable burden for the trustee and the resignation will not be greatly detrimental to the trust. Appointment of the trustee should be done formally, expressly in writing, even though it will always be implied “the individual will use the trust property, or performs any act to carry out the trust for the interest of beneficiaries”. Once the acceptance has been tendered then no court of law can prevent the trustee from holding the office, except for the breach of trust or good cause dependent upon clear and lawful necessity. So, on the resignation of the founder trustee, the Trust is not dissolved. On the appointment of a new trustee on the majority of the vote of the remaining trustees following the relevant provision of the trust deed in a duly convened meeting. Minutes of the meeting are required to be circulated to all the connected entities including Bank for information and record. On receipt of the said resolution/ Minute of the Meeting appointing new trustee/s, the Bank shall open an Account afresh in the name of the new trustee authorized to operate the Bank A/c of the Trust closing the earlier account of the trust and transferring the balance to the new account. So you need to make an application to the Bank enclosing the Minute of the Meeting jointly signed by all the trustee members for the purpose.
A trustee cannot resign without the permission of the court unless the trust instrument so provides or unless all of the beneficiaries who are legally capable to do so consent to the resignation. The court usually permits the trustee to resign if continuing to serve will be an unreasonable burden for the trustee and the resignation will not be greatly detrimental to the trust. Appointment of the trustee should be done formally, expressly in writing, even though it will always be implied “the individual will use the trust property, or performs any act to carry out the trust for the interest of beneficiaries”. Once the acceptance has been tendered then no court of law can prevent the trustee from holding the office, except for the breach of trust or good cause dependent upon clear and lawful necessity. So, on the resignation of the founder trustee, the Trust is not dissolved. On the appointment of a new trustee on the majority of the vote of the remaining trustees following the relevant provision of the trust deed in a duly convened meeting. Minutes of the meeting are required to be circulated to all the connected entities including Bank for information and record. On receipt of the said resolution/ Minute of the Meeting appointing new trustee/s, the Bank shall open an Account afresh in the name of the new trustee authorized to operate the Bank A/c of the Trust closing the earlier account of the trust and transferring the balance to the new account. So you need to make an application to the Bank enclosing the Minute of the Meeting jointly signed by all the trustee members for the purpose.
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A.Dear client,
The resignation of the founder and president should not automatically lead to the dissolution of the NGO if it is registered as a separate legal entity under the applicable laws and regulations. The bank's response suggesting that you need to re-register the NGO might be based on their internal policies or legal interpretations, which can vary among institutions. To address this issue, it is crucial to verify your NGO's legal status and review its constitution or bylaws to understand the provisions regarding leadership changes and organizational continuity. Seeking advice from legal experts or lawyers experienced in NGO matters will help clarify your organization's standing and guide you in dealing with the bank's refusal. You should also directly communicate with the bank, providing evidence of the election of a new president through a majority vote and any relevant legal documents or resolutions supporting the NGO's continued validity. If the bank's stance remains unchanged, consider approaching other financial institutions with a better understanding of NGO operations and legal structures. Legal matters can be complex, so seeking professional advice tailored to your organization's circumstances is essential to safeguard your NGO's status and address the situation effectively.
The resignation of the founder and president should not automatically lead to the dissolution of the NGO if it is registered as a separate legal entity under the applicable laws and regulations. The bank's response suggesting that you need to re-register the NGO might be based on their internal policies or legal interpretations, which can vary among institutions. To address this issue, it is crucial to verify your NGO's legal status and review its constitution or bylaws to understand the provisions regarding leadership changes and organizational continuity. Seeking advice from legal experts or lawyers experienced in NGO matters will help clarify your organization's standing and guide you in dealing with the bank's refusal. You should also directly communicate with the bank, providing evidence of the election of a new president through a majority vote and any relevant legal documents or resolutions supporting the NGO's continued validity. If the bank's stance remains unchanged, consider approaching other financial institutions with a better understanding of NGO operations and legal structures. Legal matters can be complex, so seeking professional advice tailored to your organization's circumstances is essential to safeguard your NGO's status and address the situation effectively.
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