Multiple choice

Your branch is approached by a public limited company to open a current account in their name. For the purpose of opening the account, they submit the Memorandum and Articles of Association and other papers along with a resolution passed by the Board of the company in a duly held meeting. It is observed from the Articles of Association that the Board of the company should have five directors for the purpose of business decisions, but the resolution has been passed by 4 directors, as the 5th one is away to UK in connection with a business trip.

  1. Since minimum number of directors is 3 for a public limited company, the account can be opened.

  2. Since majority of the directors were present at the meeting, the account should be opened.

  3. Bank can obtain another resolution and in the mean time open the account to increase its business.

  4. The resolution in its present form is not a proper resolution due to which account cannot be opened.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Correct Answer: The resolution in its present form is not a proper resolution due to which account cannot be opened.

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