Bank account activation with limited signatures on Partnership deed

Dear Team,

My mother in law is a partner in a partnership firm where there are total 8 partners. All partners are with equal share of 12.5%.
We have given the premises to a franchise on monthly commission where every month the amount is deposited in our current account.

Our partnership Deed is made in such a way that all parties have to agree and take a decision. Even if there is one person our of total 8 partners who does not agree than the matter cannot proceed.

So we remaining partners and newly added legal heirs decided to do some changes in the new partnership deed and the same is not acceptable to 1 partner. He wants no change in old deed.

Now the problem is as follows.

Our Current account with bank is freezed due to unavailability of KYC as there is demise of 3 partners.
We are unable to unfreeze the account since they require a partnership deed with all the signatures. The same we don't have it as 1 partner has not signed it.
The same partner has also filed a suit against remaining partners for making changes in the old deed.

So can we open a fresh current account with different bank and submit a fresh partnership deed of 7 partners instead of 8 partners on temporary basis????

We can show in court but making some affidavit that such temporary provision is done to facilitate the ongoing business till the dispute is resolved.

Because taking money directly in personal account and paying GST through different account is very difficult and there is a desperate need to open a current account.

Pls guide

Asked 4 years ago in Property Law

Religion: Other

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7 Answers

1) best option is to dissolve existing firm

According to section 43 of the Indian Partnership Act, 1932:

1. “Where the partnership is at will the firm may be dissolved by any partner

giving notice to all the other partners of his intention to dissolve the firm.”

2. “The firm is dissolved as form the date mentioned in the notice as the date of

dissolution or, if no date is so mentioned, as from the date of communication of the notice

3) then form new partnership firm and submit deed of partnership to bank for opening current account

Ajay Sethi

Advocate, Mumbai

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You can very much open a fresh current account with different bank with a fresh partnership deed of 7 partners instead of 8 partners on temporary basis. Court will take a practical view of the matter and allow you to do that. Law will not obstruct smooth flow of business. You can show to court changes are affected only for the purpose to facilitation business.

Ravi Shinde

Advocate, Hyderabad

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Talk to Advocate Ravi Shinde

plz file an application in the pending suit filed by the dissenting partner, for interim relief and for direction to the dissenting partner to sign on the kyc documents so that the business is not stuck for want of a bank account

nothing of the sort as proposed by you, that is 7 partners making a new partnership deed for purpose of opening a new account, can be done!! all will land in a big trouble

Yusuf Rampurawala

Advocate, Mumbai

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Talk to Advocate Yusuf Rampurawala

Dear Sir/ Mam

1. Maximum of 7 members of partnership have signed for the same so you can have majority over them stating the reasons of your change in deed and ask him legally by giving notice answering the reasons for not accepting the change in the deed and work accordingly.

2. You can file for fresh current account if you don't want to continue with your 8th member by filing a notice to bank and court for the same if all the members agree for it but you need to state your reason in clear words that it was required for the ongoing business which cannot be stopped for one person if he isn't agreeing for the same.

3. You have o fulfil all the conditions for opening new account and also have to mention the reason regarding GST and other difficulties taking the help of your advocate.

Anik Miu

Advocate, Bangalore

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Talk to Advocate Anik Miu

You cannot prepare a fresh partnership deed while there is a deed already existing or without dissolving the partnership firm.

You cannot take law into your hands for whatever reasons you may justify.

It can be modified and altered at any time according to the business requirements or partners' willingness.

The Partnership Deed and the addendum therefore at any time shall not override the provisions of the Partnership Act, 1932 and any other Act as may be applicable to the partnership from time to time.

The works and terms of partnership firm are governed by the Partnership Deed, which is executed at the time of formation itself. However, during the course of this partnership, many instances may arise when few changes in the terms of partnership may be required.

There are 4 steps to follow for changing the partnership deed:

Step 1: Take the mutual consent of partners.

Step 2: Prepare for making a supplementary partnership deed.

Step 3: Executing supplementary partnership deed.

Step 4: Do the filing with Registrar of Firm (RoF).

T Kalaiselvan

Advocate, Vellore

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A receiver can be appointed by the court in case of such a deadlock. He will take day to day decisions on behalf of all the partners till the situation is resolved.

A case must be filed.