Bank Signatory Left, Died or Walked Out: Unlocking the Company Account

The first few hours: shut the old authority down before you change anything

When a bank signatory resigns, leaves the country, dies or falls out with the company, the first job is not to rush a change form to the bank. It is to stop the old authority from continuing to work. A bank acts on the specimen signatures and the board authority it has on file. Until it receives written notice from the company, it will usually keep honouring that authority: cheques signed by the departed person may still clear, and the token, mobile app and online banking credentials in their hands may still function.

So in the first hours do three things. First, notify the bank in writing that the person ceased to be an authorised signatory on a stated date, ask it to suspend that person's signing rights and online access, and ask exactly which documents the bank needs to complete the change. Have the letter signed by a director or officer who remains in office, stamp it, and keep proof that the bank received it. Second, list every payment in transit: issued but uncleared cheques, scheduled transfers, auto-debits, letters of credit and guarantees. Split them into payments that must go out on time and those that can safely wait. Third, recover the physical and digital keys: cheque books, the company seal, tokens, linked phones and the online banking administrator account. Anything you cannot recover should be named in the notice so the bank can cancel it.

If the departure was friendly, this usually settles within a day or two. If it was hostile, the written notice becomes the starting point of every later argument, because transactions the bank processed before it was told are hard to unwind. The related risk of former staff keeping company accounts is covered in what to do when a former employee keeps company accounts.

Identify which kind of gap you have: four cases, four orders of work

"We can't move money" has different causes, and the bank will ask for different things in each. Work out which case you are in before you act.

1. Friendly resignation or reassignment. The person is reachable and willing to help. The board resolves to change the signatories, the corporate secretary certifies the resolution, the outgoing signatory returns tokens and signs any bank form that requires it, and the new signatory completes identity checks and specimen signatures at the branch.

2. Long absence abroad, still cooperative. A foreign director who has gone home is a common example. Many banks accept documents signed abroad, but these usually need notarisation and authentication, and requirements vary by country and by bank. In practice many companies find it faster and safer to add or substitute a signatory who is in the Philippines rather than courier papers back and forth.

3. Death. Once the bank learns a signatory has died, it will generally stop accepting that signature. The company should appoint a replacement by resolution as soon as possible. If the deceased was also a director or shareholder, board numbers and the inheritance of shares come into play; see when a director dies or resigns and the board falls below minimum and when a shareholder is missing or has died and there is no quorum.

4. Dispute, disappearance or refusal to cooperate. This is the hardest case. Revoking someone's authority normally rests on a valid company resolution, not on that person's consent. The difficulty is that the person is often also a director or a major shareholder, so the company cannot hold a valid meeting or pass the resolution. Protect the account first through written notice and suspension, then deal with the governance deadlock, with a lawyer involved early.

What the bank usually asks for when signatories change

Each bank has its own checklist and the one your branch gives you is the one that counts, but the core documents are broadly similar. Preparing them together saves repeated trips.

1. Board resolution. It should state whose authority is revoked, who is added, the signing rules (single or joint, tiers by amount) and which accounts and channels it covers: counter, cheques and online banking. The structure is almost identical to an account-opening resolution, so the checklist in how to write a board resolution to open a bank account applies. 2. Secretary's Certificate. It certifies that the resolution was validly passed and is usually notarised. If the corporate secretary has disappeared, this is where you get stuck; see when the corporate secretary or treasurer cannot be reached.

3. Corporate records that match the SEC file. The latest GIS, the articles and permits. Banks compare the directors and officers in your resolution with what the SEC holds; people who changed without an SEC update are a frequent reason for rejection. See how to change company details with the SEC. 4. Identity documents of the new signatory. Filipino citizens provide valid government ID; foreigners normally provide a passport, and long-term residents are often asked for an ACR I-Card or similar proof of status, as the bank requires. 5. New specimen signature cards and online banking forms, signed in person by the new signatory.

Before you submit, check three things: the resolution is dated after the change in personnel, every name is spelled exactly as in the passport and the GIS, and the signing rules actually fit how the company pays its bills. Many rejections come down to a single letter.

Paying people in the meantime: payroll, suppliers and cheques already issued

There is usually a gap between notifying the bank and the new signatory taking effect. What hurts most in that gap is late payroll, suppliers stopping deliveries and cheques bouncing. Planning ahead costs far less than fixing things afterwards.

Rank the payments. List what must be paid in the coming weeks: wages and statutory contributions, rent, critical suppliers, taxes. Anything that can properly be paid early should be paid by a signatory who still has valid authority before the old authority is suspended. For the rest, write to the payee, explain the reason and give an expected date. Most long-standing counterparties will accept a short delay. Few will accept silence.

Cheques already issued. If normal business cheques were signed by the departing signatory, ask the bank how it will treat them during the change: will they clear, or be returned because the authority is suspended? A returned cheque creates credit and legal trouble for the company, so contact the holder to replace it if necessary. If you suspect the departing person issued unusual cheques before leaving, list the numbers in your notice, ask for a stop payment, and keep the evidence. A lost or stolen cheque book or token follows the same order: notify the bank, stop payment, freeze access.

A second account. If the company has an account at another bank with different signatories, it can carry payments temporarily. Companies without one should consider opening one afterwards; see the complete guide to opening a corporate bank account. Do not route company money through a shareholder's or employee's personal account in the meantime. That creates a new compliance problem, explained in why company and personal accounts must stay separate.

When the other side refuses: revoking authority, protecting funds, breaking deadlock

A signatory who has fallen out with the company may keep the token, refuse to sign anything, continue using old access, or argue that the resolution removing them is invalid because they are still a director. Keep two tracks separate: protecting the money and resolving the people problem.

Protect the money. In your written notice, tell the bank that there is an internal dispute and ask it to treat instructions from that person with caution until it receives a valid resolution. The bank will not decide who is right. It will ask for valid corporate documents, and to protect itself it may restrict the account until the authority is clear. That is a cost the company has to bear, and the reason to settle the governance question quickly. If the person moved company funds during the dispute, keep statements, notices and messages as evidence; the approach is similar to what to do when a partner absconds with company funds.

Resolve the people problem. Revoking signing authority usually needs only a valid board resolution. The hard part is that when the person is a director or major shareholder, you may not reach a quorum or win the vote. At that point the company has a governance deadlock rather than a banking issue; see how to break a shareholder deadlock. Where the person is a nominee director or nominee shareholder, the position is more complicated still; see when a nominee shareholder turns hostile. Have a licensed lawyer assess these situations early, and never fabricate minutes or signatures: doing so would destroy the company's standing in any later proceeding.

Preventing the next lock-up, and how Yixing can help

Almost every account freeze caused by a missing signatory can be prevented. First, keep at least two signatories, and do not make them all people likely to be abroad at the same time, such as two foreign executives who travel home often. Second, tier the signing rules by amount: single signature for small payments, joint signatures for large ones. This stops one absence from blocking all payments and stops one person from moving large sums alone. Third, update immediately when people change: start the SEC and bank updates on the day a director, officer or signatory changes, and recover tokens, cheque books and administrator rights. Fourth, keep a bank-access register listing every account, channel, person, token number and linked phone, and tick each item off at handover. Respond promptly when the bank asks for periodic updates, or the account may be restricted for that reason too; see what to do when the bank asks you to update corporate KYC.

Yixing International Travel (SEC registration CS202009551, Bureau of Immigration accreditation CA-202624381-1) supports Chinese-owned companies in the Philippines through its compliance retainer service: drafting the board resolution and Secretary's Certificate for a signatory change, checking that the GIS and other SEC records match the bank's file, organising the bank's document list, setting up a bank-access register, and introducing licensed counsel when a shareholder or director dispute arises. We are not a bank, we cannot influence a bank's review, and we do not promise any processing time or result. What we can do is make the documents complete and consistent the first time. For your specific case consult a licensed attorney; this article is not legal advice.