worldbanks.news

What precautions to be taken prior allowing credit to a sole proprietorship?

Bankers Of the Article

What precautions to be taken prior allowing credit to a sole proprietorship?/In which circumstances, a married woman can bind her husband in respect of her availed loans & advances?/What precautions Bank should take prior allowing credit to joint account?/Distinguish between “Agent” & “Trustees” ?/What are the distinguish between “General & Special Power of Attorney”?

 
|
 
    1. What precautions to be taken prior allowing credit to a sole proprietorship?

      Ans. Banker should take a declaration from the owner that he is the sole proprietors and no other person has any interest in the business as partner or otherwise. He should also state that as the sole proprietor, he will be personally liable for all dealings and obligations in the name of business.

    1. In which circumstances, a married woman can bind her husband in respect of her availed loans & advances?

    Ans.    i). Where the wife acts as the agent of her husband and obtains loans. ii). Where she obtains a loans for the purpose of purchasing necessaries for herself or for the household.

    1. What precautions Bank should take prior allowing credit to joint account?

    Ans. i). A clear & specific authority from the joint holders in regard to overdrawing the account, taking and advance or changing a security by one or more to them.   ii). Any advance must have approval from all otherwise only those who signs will are liable.   iii). Loan request letter to be signed by all joint account holders.   iv). Bank can claim a right of set off  against the credit balance in the private accounts of the parties or joint account of any two of them against an advance in joint account.   v). In the case of death or insolvency of any of the joint account holders, it is advisable to stop the account if it is in debit. 07.07.09 reviewed

    1. Distinguish between “Agent” & “Trustees” ?

    Ans. An agent is a person employed to act for another or to represent another in dealings with third party. An agent is to be a major & of sound mind, so as to be responsible to his principal.   A Trustee is a person in which confidence is imposed. He is given control of an estate, usually of the deceased person, for the purpose of the benefit of certain person. The person reposing the trust is called trust author.

    1. What are the distinguish between “General & Special Power of Attorney”?

    Ans.  In case of general power of attorney, the person appointing the attorney authorizes him to act on his behalf for more than one transactions. While special power of attorney authorizes a person to act in a single transactions.

 

 

9 thoughts on “What precautions to be taken prior allowing credit to a sole proprietorship?”

Leave a Reply

Your email address will not be published. Required fields are marked *