Freezing of a firm bank account
4 months ago
two partners share 40 perecent of share in a firm. There are 6 other partners who share the remaining 60 per cent of the share. Can the two partners with 40 per cent share, ask the bank to freeze the bank transactions until the disputes settles between all the 8 partners.
A.Dear Client,
A partnership firm and the relationship between the partners are governed by the Deed of Partnership executed by all the partners. The percentage of share in the capital invested by partners and share in profit and loss of the business have no role to play and the partners keeping a higher percentage of share in the business cannot take a decision outrightly contrary to the provision of Deed of Partnership. A clause in the Deed of Partnership jointly executed by all the partners is required to be deposited to the concerned Bank for opening and operating an account of the firm authorizing the partners to handle Bank-related transactions on behalf of the firm. If two out of eight partners want to freeze the firm Account, for such a revision in the mode of operation of the account, Bank requires a revised Deed of Partnership or a copy of the resolution jointly taken by all the partners to that effect. Disputes between partners are resolved either through mutual understanding or through arbitration under the Arbitration and Conciliation Act, 1996 provided a clause is mentioned in the Deed of Partnership. Otherwise, disputes are resolved or the partnership is dissolved through the intervention of the Court on the appeal of partners.
A partnership firm and the relationship between the partners are governed by the Deed of Partnership executed by all the partners. The percentage of share in the capital invested by partners and share in profit and loss of the business have no role to play and the partners keeping a higher percentage of share in the business cannot take a decision outrightly contrary to the provision of Deed of Partnership. A clause in the Deed of Partnership jointly executed by all the partners is required to be deposited to the concerned Bank for opening and operating an account of the firm authorizing the partners to handle Bank-related transactions on behalf of the firm. If two out of eight partners want to freeze the firm Account, for such a revision in the mode of operation of the account, Bank requires a revised Deed of Partnership or a copy of the resolution jointly taken by all the partners to that effect. Disputes between partners are resolved either through mutual understanding or through arbitration under the Arbitration and Conciliation Act, 1996 provided a clause is mentioned in the Deed of Partnership. Otherwise, disputes are resolved or the partnership is dissolved through the intervention of the Court on the appeal of partners.
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A.Dear Client,
No the partners cannot ask the bank to freeze the account on their own. Weather they share a major percentage and othe other partners doesn't but they have the equal right and say in this matter. So, legally this can't be done.
No the partners cannot ask the bank to freeze the account on their own. Weather they share a major percentage and othe other partners doesn't but they have the equal right and say in this matter. So, legally this can't be done.
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