A warning of potential troubles from UK Finance says (effectively, the British Bankers Association as was). This was in answer to a question I raised:
“This is a difficult question to generalise about because the answer depends on the company’s governing documents, the circumstances, and the law.
It could be, for example, that the Articles of Association say that a person will cease being a director if a medical practitioner treating the director provides a written opinion that the director has become mentally incapable of acting as a director.
However, it’s possible that this opinion could be open to challenge.
If a director remains in office despite their incapacity, the fact that the position of director is a personal appointment means that it is not possible to appoint an attorney to make decisions in that capacity, unless the Articles allow this or are amended to allow it.Â
So, if put on notice, given the complexities, the bank would probably need to inhibit the account until the facts could be established and legal guidance obtained.”
For companies formed companies incorporated before 28 April 2013 using the Model Articles of Association, a director losing mental capacity will automatically be removed from office, potentially leaving the company leaderless.
