Q: Debit Cards

Q : Our bank (Barclays) have advised us that they will soon be discontinuing the use of cheque submission and advised us to make use of electronic banking and have the use of a debit card for purchase of items needed to maintain the property. The directors had a meeting in August and agreed to obtain two debit cards for the association. We have used this card on one occasion since. However, one of our directors has queried if this is included in our Articles of Association and that we are not beaching any clauses. This person thinks it may be risky and all directors can be held accountable. My question is: Is there any approved wording that we could use to be included in our articles that would allay any fears of accountability in respect of the use of electronic banking and the use of debit cards for purchases? We are a directorship of six residents, none of which have a great accounting knowledge FPRA Vice Chairman Richard Williams replies : The Articles of Association merely require the company to have a bank account. The Articles do not require the account to be operated by any particular means or technology. I therefore do not think that there is any need to alter the Articles of Association. Nowadays I do not think that electronic banking would be regarded as unusual or hazardous. In so far as any protection is needed, in order to protect the directors, consideration might be given to having a formal Board resolution governing the use of the debit cards i.e. who can use them and what authorisation is needed for payments, or at least payments over a certain amount. The lease does not require payment to be made in any particular way, either by or to the company. The practical question is whether there are any leaseholders who are reluctant to pay service charges other than by cheque.

Q: Debit Cards

Q : Our bank (Barclays) have advised us that they will soon be discontinuing the use of cheque submission and advised us to make use of electronic banking and have the use of a debit card for purchase of items needed to maintain the property. The directors had a meeting in August and agreed to obtain two debit cards for the association. We have used this card on one occasion since. However, one of our directors has queried if this is included in our Articles of Association and that we are not beaching any clauses. This person thinks it may be risky and all directors can be held accountable. My question is: Is there any approved wording that we could use to be included in our articles that would allay any fears of accountability in respect of the use of electronic banking and the use of debit cards for purchases? We are a directorship of six residents, none of which have a great accounting knowledge FPRA Vice Chairman Richard Williams replies : The Articles of Association merely require the company to have a bank account. The Articles do not require the account to be operated by any particular means or technology. I therefore do not think that there is any need to alter the Articles of Association. Nowadays I do not think that electronic banking would be regarded as unusual or hazardous. In so far as any protection is needed, in order to protect the directors, consideration might be given to having a formal Board resolution governing the use of the debit cards i.e. who can use them and what authorisation is needed for payments, or at least payments over a certain amount. The lease does not require payment to be made in any particular way, either by or to the company. The practical question is whether there are any leaseholders who are reluctant to pay service charges other than by cheque.

Question 1

Debit Cards

Accepted Answer

Q: Our bank (Barclays) have advised us that they will soon be discontinuing the use of cheque submission and advised us to make use of electronic banking and have the use of a debit card for purchase of items needed to maintain the property. The directors had a meeting in August and agreed to obtain two debit cards for the association. We have used this card on one occasion since. However, one of our directors has queried if this is included in our Articles of Association and that we are not beaching any clauses. This person thinks it may be risky and all directors can be held accountable. My question is: Is there any approved wording that we could use to be included in our articles that would allay any fears of accountability in respect of the use of electronic banking and the use of debit cards for purchases? We are a directorship of six residents, none of which have a great accounting knowledge FPRA Vice Chairman Richard Williams replies: The Articles of Association merely require the company to have a bank account. The Articles do not require the account to be operated by any particular means or technology. I therefore do not think that there is any need to alter the Articles of Association. Nowadays I do not think that electronic banking would be regarded as unusual or hazardous. In so far as any protection is needed, in order to protect the directors, consideration might be given to having a formal Board resolution governing the use of the debit cards i.e. who can use them and what authorisation is needed for payments, or at least payments over a certain amount. The lease does not require payment to be made in any particular way, either by or to the company. The practical question is whether there are any leaseholders who are reluctant to pay service charges other than by cheque.

Question 2

Debit Cards

Accepted Answer

Q: Our bank (Barclays) have advised us that they will soon be discontinuing the use of cheque submission and advised us to make use of electronic banking and have the use of a debit card for purchase of items needed to maintain the property. The directors had a meeting in August and agreed to obtain two debit cards for the association. We have used this card on one occasion since. However, one of our directors has queried if this is included in our Articles of Association and that we are not beaching any clauses. This person thinks it may be risky and all directors can be held accountable. My question is: Is there any approved wording that we could use to be included in our articles that would allay any fears of accountability in respect of the use of electronic banking and the use of debit cards for purchases? We are a directorship of six residents, none of which have a great accounting knowledge FPRA Vice Chairman Richard Williams replies: The Articles of Association merely require the company to have a bank account. The Articles do not require the account to be operated by any particular means or technology. I therefore do not think that there is any need to alter the Articles of Association. Nowadays I do not think that electronic banking would be regarded as unusual or hazardous. In so far as any protection is needed, in order to protect the directors, consideration might be given to having a formal Board resolution governing the use of the debit cards i.e. who can use them and what authorisation is needed for payments, or at least payments over a certain amount. The lease does not require payment to be made in any particular way, either by or to the company. The practical question is whether there are any leaseholders who are reluctant to pay service charges other than by cheque.

Debit Cards

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