Do both Directors not need to sign??

[shaunatsf]

OK any help or advice would be appreciated on this one. A company has two directors, director A and director B.

Director A is in charge of all the books, sales, purhcasing, etc and Director B is in charge of all production. Director A goes to the bank and arranges an overdraft without the knowledge of Director B, all the money in this overdraft goes missing (some used to pay bills I am sure, not 100% where the rest of it went but mostly into Director A's other business' bank account).

Director B wants to buy out Director A and they agree a way this can be done, however the overdraft then comes to light and the bank want Director B to put a personal gaurantee to it.

Should the bank have allowed this overdraft on the signature of only one director, or should two signatures have been required?

 

[businessfunding]

It is down to the directors do decide who is mandated to sign, not the bank.

If, however, the drector has gone outside the bank mandate and the bank have cleared funds then they will be liable.

In most, but not all cases, bank mandates will be direct reflection of signatures required to commit the company outlined in the Mem & Arts of Association.