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A Minor as an Account holder
A minor is a person under the age of 18 years. Minors are protected in law: in respect of
contracts they are only liable for necessities and for certain transactions of continuing
nature.
Position as an account holder
a) Credit account. A minor can operate a credit account in the usual manner, the
banker obtaining a good discharge of all disbursements from the account since
any contract for repayment of money is void.
b) Unsecured overdraft. A minor should not be permitted to overdraw this account.
c) Secured overdraft. As a minor's contract in respect of a loan or overdraft is void,
then any security deposited by a third party to secure the minor's account is
unenforceable unless taken in the form of an indemnity. A minor cannot secure
his own account
Minor as member of a partnership.
A minor can be a member of a partnership and can bind the partnership in the ordinary course of business. Where a partnership
which contains a minor member operates a banking account, should bear in mind that :
a) The minor may be permitted to draw cheques and to overdraw the partnership
account as agent for the partnership. The usual mandate should be taken.
b) The minor will not be liable personally for partnership debts, even if the
partnership becomes bankrupt. However, all partnership assets, including the
minor's share, are unavailable for partnership creditors.
c) The minor's personal security cannot be accepted for partnership debt.
d) Liability after majority. If the minor does not repudiate his/her position as
partner either before or within a reasonable time on his/her majority will be
personally liable for partnership debts incurred after majority.
Minor as a joint account holder.
It is allowed for minor to be a party to joint account.
However, a minor is not liable in respect of overdraft incurred. The bank requires the
usual mandate to be completed, which incorporates an express clause that the balance of
the account vests in the survivor(s) in the event of death.
NatalieR answered the question on February 15, 2022 at 04:59
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