Issue legal notice to bank to permit addition of signing authority
enclose copy of LLP agreement which permits addition
3) if bank refuses obtain court orders to direct bank to add signatory
Non cooperation of LLP partner in banking
Hello, A LLP registered have 4 partners A(15%), B(25%), C(50%) and D(10%). A,C & D are somehow related to each other. A & B are friends, managing partners of the company and also the signing authority in bank. B gets paralyzed with right side and can not sign. Doctors says may need minimum of 2-3 months to recover. In given condition request is been given to B to allow adding addition authorized signatory in bank but B did not respond. A, C & D submitted resolution in the bank to add D as signing authority. B have some relatives in the bank and their by writes an email to the bank that he is alright to make online transactions and do not add additional signatory without my consent. But B is not passing the payments online, nor receiving any calls or checking the WhatsApp messages. His family checking the messages and passing selected payments only. When asked bank why they are not adding the signing authority when LLP agreement and the Company law allows to do say. Bank issues a letter that they got objection from B and find it as a dispute so we can not procced. What could be the probable solutions for A, C & D for B and the bank? Kindly guide.
Asked 4 years ago in Business Law
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6 Answers
In case of any dispute bank will not add the signature in the account in this case you have to approach to high court to get order in this regard however it is also possible to approach the banking ombudsman but that will be taking time and in that case if banking ombudsman will not take decision then high court may reject the application on the ground that I'm books one has to decide in this regard.
1. LLP is a registered legal entity and Bank is legally bound to honor the resolution passed by majority stake holders (A, C, D). Failure to record and act on Client's instructions amounts to negligence & deficiency & harassments & illegal trade practices and Bank becomes liable under the Consumer Protection Act.
2. Further, majority stake holders (A, C, D), may remove "B" from the Board of LLP for acting against the overall interest of LLP. Further "B" will just remain share holder without any executive & management authority.
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They need to approach the court for relief in such matters. Bank can't be an adjudicatory authority
need to look into the clauses of your LLP agreement to ascertain how the mandate of the present authorised partners for purpose of doing bank transaction can be modified
a resolution was submitted to the bank to accept D in place of B as a signing authority with A
It needs to be checked whether, given the percent holding of the partners in the firm, a majority resolution can be passed and whether this is permitted under the LLP agreement
Rights and duties of partners of an LLP and mutual rights and duties between an LLP and its partners are governed by the LLP Agreement between the partners or between the LLP and its partners.
LLP is required to file information about the LLP Agreement, changes in the LLP Agreement and changes in particulars of designated partners and partners.
LLP is largely governed by the agreement amongst the partners. Hence drafting of LLP agreement is crucial and it is necessary to cover various aspects governing business and relation amongst partners and between LLP and its partners.
Mutual rights and duties of partners and mutual rights and duties of LLP and its partners are governed by the LLP Agreement between the partners, or between the LLP and its partners. Information relating with regard to the LLP Agreement and any changes therein is required to be filed with the Registrar in Form 3. In case the LLP Agreement is silent on any matter, provisions in the First Schedule to the LLP Act relating to that matter will apply. It may be noted that First Schedule is not very comprehensive to cover various situations and hence it is necessary to cover various aspects in the LLP agreement
