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Ex Director still a bank signatory

Can she still sign off?

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Hi,

Following a company takeover the old director has resigned but is the sole signatory on one of the bank accounts. I need to shut it down but she's saying she can't sign now which makes closing it problematic. Has anyone had this before?

Thanks

John

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By WhichTyler
29th Nov 2021 08:11

The new directors need to write to the bank to be added to the mandate and remove the old one. the bank will need to ID the new directors in order to accept their instruction but if they are the actual directors (and verifiable on companies house), then the bank will eventually have to go along with it. An ex-director mustn't sign something that is the responsibility of current directors

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By MDK45
29th Nov 2021 08:37

Thanks for a comprehensive response. But will the bank accept the mandate changes if the old director is the current only person on the existing mandate?

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By WhichTyler
29th Nov 2021 10:26

Bank mandate instructions normally take the form of (something like)
' it was resolved at a meeting of the directors of X plc on [date], that Ms A be removed from the bank mandate and Ms B be added in their place' signed by chair of meeting, co sec, director etc.

So if all that is in place the bank should (eventually) comply; remember it is the company, not the individual, that is the bank's customer. If the bank don't know who the new director is, the bank will want to KYC them

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By WhichTyler
29th Nov 2021 10:29

Is the bank going to have a continuing relationship with any of the companies?

If so then they will need to know there are new directors, so follow my route
If not, then Paul B's route is more expedient, but make sure past & present directors agree the process in writing...

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By paul.benny
29th Nov 2021 08:42

You don't have to be a director to appear on the signature mandate. But if it's a question of closing an account, the bank may insist on that instruction coming from a current director. I'd put the question to the bank.

Possibly easier than getting bank to accept new directors, you could reappoint former director (and file at CH) for the purpose of closing the account and file resignation immediately instructing bank.

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By Leywood
29th Nov 2021 09:10

Was it part of the deal completion that she resign? If so it should have been included in the contemp paperwork pack. If only minutes/documented in the pack surely the mandate to add a new bank signatory/director can be completed as at that date along with her removal from the mandate by her signing off as the outgoing director.

Agree easiest is per PaulB

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By MDK45
29th Nov 2021 09:26

I wasn't privvy to any of that being a mere employee here! There's a couple of options here. Thanks everyone.

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By Leywood
29th Nov 2021 10:20

I would suggest your first port of call are the professional advisors used for the deal, via your boss.

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