Trust accounts:-

a) In case of public trust, registration certificate of charity

commissioner is necessary and in case of private trust it is
optional.
b) If any one trustee dies the provisions of trust deed will operate.
If the sole trustee dies, further operation in the account will be
stopped and cheques already signed by him should be paid.
c) Any trustee can give stop payment instructions including those
who is not authorised to operate the account.
d) Trustee can not delegate his powers unless it is provided in trust
deed.
e) Trustee can not borrow unless it is specifically mentioned in the
trust deed.
f) In case of death/insolvency/ insanity of the trustee, the
Cheques issued by him will be paid if otherwise in order.

Partnership firms:-

a) Partnership firms are governed by Indian partnership Act-1932.

b) Minor can be admitted to the benefits of partnership with the consent
of all the partners. He is not personally liable but his share of property
is liable.
c) Registration of partnership firms is done with Registrar of firms. Bank’s
normally do not grant any type of credit facility to the non-registrar
firms as unregistered firms can not enforce any suit against the third/
third parties.
d) Number of partners: mini- 02 and maxi- 10 in case of banking business
and 20 in case of other business. Maximum number of partners has been
specified in section 11 of companies act.
e) A partnership consisting of 20 partners plus two minors is a legal
association.
f) HUF cannot be a partner. However since the company has separate legal
entity, it can become the partner if permitted by Articles of association.
g) Under section 19(1), the acts of a partner to carry on business of the firm
in a usual way, binds the firm and a partner is an agent of the firm for the
purpose of business of the firm. In order to bind the firm by his acts, a
partner must sign for and on behalf of the firm.
h) As per section 18 of Partnership act, every partner is the agent of firm for
the purpose of the business of the firm. Therefore, act of a partner is
known as the act of the firm. This is known as the implied authority of the
partner. This rule has certain exceptions.

Joint stock companies:-

Partnership Pvt Ltd Public Ltd.

Mini.members Two Two Seven
Maxi. 10 banking Fifty No limit
Members 20 others
Directors Not applicable Mini. 2 Mini. 3
Maxi. No Maxi. No
limit limit

Some important features of a company:-

a) Memorandum of Association: is the constitution of the company

and it establishes the relationship of the company with the world.
b) Articles of Association: are bye- laws and internal rules and
regulations of the company.
c) Certificate of incorporation: issued by the Registrar of Companies,
under section 35 of co’s act-1956. The legal existence of the company
begins from the date of issue of certificate.
d) Certificate of commencement of business: A public limited
company having a share capital and issuing a prospectus can not
commence the business until the registrar issues the certificate of
commencement of business.
e) Borrowing powers of the company: The board of directors of
private limited company has unlimited powers to borrow. However the
Board of Public limited company can borrow up to paid up capital plus
free reserves of the company. If they intent to borrow more than that,
general body resolution under sec. 293(1)(D) is required to be passed.
f) Death of director: As the company has a separate entity, the death
of any director does not effect the operations of the account. Even if
cheque signed by the authorised director who has died, is presented
after death, the banker cannot return the cheque for that reason.
g) Conversion: A cheque payable to the company should never be
deposited in the personal account of directors, as it would amount to
conversion under section 131 of the N.I. Act.
h) Section 125 of Companies Act: Provides that all charges created on
a company’s assets except pledge, lien, and set-off,
appropriation, trust receipt have to be registered with the Registrar
of Companies with in 30 days of creation of the charge. Otherwise, the
charge is void.