Cheque into different account?

In message , Eric Jones writes

Doesnt a 'crossed cheque' (without any further qualification) merely mean that the drawee can only pay out to another banker? It doesnt effect transferability or negotiability at all.

I know of no law that specifically restricts the collection of a cheque for the payee only.

Have you therefore contacted the Law Society to see what they advise? Eric

Under the Cheque Act, UK cheques are not negotiable instruments. Read the prior posts.

A bank may, but need not, accept the deposit to your account of a cheque made out to someone else and endorsed. It will almost never accept the deposit of a cheque made out to a company into the account of an individual.

A bank will usually allow a cheque made out to an individual or to a business name, or another firm, to be deposited in a company account. If they know you, if they have recourse, etc. Explanation already given.

Why do people post stuff that has no bearing in law or fact without checking, at least, Google if not a manual on company law. The search terms are In virtually every country of the world, solvent companies can be liquidated administratively at the behest of the shareholders and directors subject to a solvency test and to payment of all taxes and franchise fees. There may be a residual liability on the part of those persons for certain debts, especially wages and taxes. It can be assumed that the original inquirer had an accountant who was well aware of the statutory duties and administrative procedure.

There is, as I wrote before, a procedure for re-opening a company. There is also law regarding doing business in the name of a company not yet formed or in the process of formation (anticipatory business, some of which is legitimate and binding on the firm and some not and done at the risk and liability of the persons doing it unless and until ratified and paid for by the firm) and (the more difficult case) business transacted after the firm is dissolved. As there is substantial money involved here -- £12,000 -- the inquirer should get professional help and not mess up in a way that will cost him all that money in grief and legal expenses and taxes later. The last thing he should want is the Inland Revenue somehow declaring the £12,000 to be a dividend because the proper formalities were not undertaken.

Here are a few sites:

Dormant companies

Voluntary liquidations Tax implications The advice given on this ng on technical matters is woefully inadequate. Anybody who relies on a ng for legal advice is getting far less than he pays for it...

In message , Tam writes

To which Cheques Act and to which section are you referring?

The cheques act 1992 modifies the Cheques Act 1957 and the bills of Exchange Acts. Nowhere can I see where a generally crossed cheque (as opposed to a restrictively or specially crossed cheque) is non negotiable.

No. You can sign the declaration on Form 652a. It gets published in the London Gazette, and if there is no objection, the company will be struck off.

Fair enough,

BUT arent there some rules especially when the company has been trading and there are creditors?

It's not a negotiable instrument. If you're not a lawyer, I'm not going to educate you on legal principles now. And the issue is so well settled that I don't have to research it again. A "negotiable instrument" is financial paper transferable by endorsement or (if payable to bearer, like money or bearer bonds) by simple handing over. It's a term of art.

This does not mean that a bank cannot and will not encash a cheque that has been transferred by endorsement. But it does not have to.

Anyone who knows anything about the subject can tell you about The Honourable Society of the Middle Temple v. Lloyds Bank plc [1999] 1 All ER (Comm) 193. Or you can look up the case, which illustrates the weakness of the Cheque Act when UK cheques are encashed abroad, fraudulently.

Indeed, our original enquirer could almost certainly get the cheque credited to his own, or anyone else's account in a foreign country. Where they don't necessarily know UK law and regulations.

So skip the snide remarks. And I don't know why I took the trouble, but I've uploaded the Middle Temple case:

It occurs to me there is a simpler explanation; you can accept or not my adumbration of what the law is:

In the UK, but not in the USA or, I think, France and many other countries, the handing over of a cheque is not a novation of the debt, it does not (because there is no independent consideration) constitute a new obligation. So one may defend the nonpayment of the cheque on the basis of any defence that one could have used to oppose the original obligation.

Thus, in a case where a friend of mine was misinformed by an ignorant solicitor, where the passenger in a Polish vehicle gave my friend a cheque in payment of damages the Polish driver (her employee) had caused to the friend's car, and then countermanded the cheque, there was no remedy in Small Claims Court. This being pre-EU, trying to collect from the Polish insurer was a mug's game that went nowhere; it would have cost more than the £100 damage.

Had the cheque been guaranteed with a cheque guarantee card, it couldn't have been countermanded, but only because there is a contract between the account holder and the bank that prohibits it. And the payee of the cheque has a remedy against the bank, not the account holder. (Such guaranteed cheques are, sometimes, refused payment by the bank if it suspects fraud and complicity by the payee.)

In many or most states of the USA or in France, in a suit for a bad cheque one sues on the cheque and need not assert the underlying debt. In France and in some US states, tendering a bad cheque is a crime. (In the USA a postdated cheque is, however, a promissary note; but in the present age both in Britain and in the USA postdated cheques are routinely paid by the banks irrespective of any dates or conditions printed on them.)

In message , Tam writes

Your quoted case is handy as it clearly refers to cheques as being negotiable instruments, but in any event it is not relevant to my point because the case revolves around restrictive crossings whereas I was at great pains to point out that I was referring to general crossings only.

So, no snide remarks just facts which you have helpfully provided. Do you want me to post a link to the 1992 Cheques Act?

That's dictum, careless use of words not relevant to the holding. The definition or a negotiable instrument in Black's Law Dictionary is:

"A written and signed unconditional promise or order to pay a specified sum of money on demand or order to pay a specified sum of money on demand aor at a definite time payable to order or bearer. U.C.C. 3-104(1). To be negotiable within the meaning of U.C.C. Article3, an instrument must meet the requirements set out in Seciton

3-104: (1) it must be a writing signed by the maker or drawer; it must contain an (2) unconditional (3) promise (example, note) or order (example: check) (4) to pay a sum certain in money; (5) it must be payable on demand or at a definite time; (6) it must be payable to the bearer or to order (examples of instruments payable to order are (a) "Pay to the order of Daniel Dealer," and (b) "Pay Daniel Dealer or order"); and (7) it must not conrtain any other promise, order, obnligation, or power gioven by the maker or drawer except as authorized by Article 3. See also Commercial paper; Negotiation"

UK cheques are, by the statute you have cited, not endorsable and payable to the order of the payee: the only right the payee has is to pay it into a bank account, ususally his or her own. He can not negotiate the cheque on the open market, so to speak.

But perhaps this is all semantics, since we don't disagree with what the payee can actually do with the cheque. Furthermore, the UCC has no force outside the 50 U.S. states and the District of Columbia, plus the 5 or so U.S. territories and (by practice if not law) the rest of the dollar zone: Palau, etc.

Sorry, but I only have US, Canadian and French law dictionaries on my bookshelf.

In message , Tam writes

You still miss the point. The Cheques Act 1992 removes some negotiability only if there is a restrictive crossing. A UK cheque is negotiable if it has a 'general crossing', In practice most banks these days have a restrictive crossing pre-printed on the cheque form and it is this restriction, not the crossing per se, that effects negotiability and transferability. The restriction can be removed by deleting the words 'a/c payee only' and signing the amendment.

So it would appear.

I have none of those, but I do have the UK Law Books including those specific to UK Banking Law, and, of course, copies of the UK Acts namely The Bills of Exchange Acts, and the Cheques Acts and I think it is these that are relevant to this case (being in UK).

I'm not going to belabour the point. This is not my area of law (although in all the years I spent in law schools in the USA, UK and Belgium doing research and getting degrees the issue did come to my attention). But I have argued the issue to death with bankers and, in the end, lost -- even when we were talking about US$ checks that, unlike (as I maintain) GBP cheques, ARE fully negotiatiable, they would not accept them into the account of a non-payee.

The fact is that my friend lost in court on the issue, and I would not be prepared to appeal. If you think the judge was wrong, that's your privilege.

Perhaps you are a solicitor or a barrister, notwithstanding the paragraph below. But AFAIK even if you write on a UK cheque "please pay cash" that does not ever give the cheque the quality of a negotiable instrument, viz.: enforceable against the drawer irrespective of countermanding and claims by a third party bona-fide purchaser. (Hey, I write on cross-border bankruptcy, and I do know what qualities a transaction has to have to be bullet-proof against a trustee or receiver.)

And: not to be a pedant, but it's the Cheque Act 1992 (singular). So I wonder whether you are a lawyer (you didn't say that you were) after all.

BTW the only reason I don't have a British law dictionary is that there isn't one worth buying. I happen to live in London.

In message , Tam writes

Only because of the restrictive crossing printed on it, which is optional.

Wrong Im afraid.

That proves you dont know what you are talking about

To help you, the relevant para is no 4 which says "4.?(1) This Act may be cited as the Cheques Act 1992."

And the title at the top is also a bit of a giveaway, I think.

It modified the Cheques Act 1957 (plural) and the Bills of Exchange Act

1882(also plural)

Perhaps if you DID get a UK Law Book you would at least know the names of the Acts.

What exactly is (can you give examples of) a "general crossing", please?

In message , Ronald Raygun writes

Two parallel lines.

Oh, right. But why do they not count as "restrictive", seeing as their intended purpose, presumably, is to restrict how (as opposed to to whom) the cheque could be paid?

And while I'm asking elementary questions, what exactly does the "& Co" stand for, which it was in vogue once upon a time to write inbetween those parallel lines? It didn't actually mean anything other than unadorned lines, did it?

A general crossing merely instructs the drawee to pay the cheque only to another banker, not in cash. That is a 'general' crossing. It used to be a practice to write the name of that banker on the front of the cheque, if the drawer knew through which bank the payee would collect the cheque so the '& Co' allowed the insertion of the bankers name before it. This is a 'special' crossing. A holder of an uncrossed cheque can add a crossing if he wishes. When a cheque is paid in at a collecting bank, that bank 'crosses' the cheque by the application of its 'crossing stamp' so as to ensure that the drawee only pays the dosh to the crossing bank.

A 'restrictive' crossing is where words are added such as 'a/c payee only', 'not negotiable' 'not transferable' etc.. It is possible to have a general crossing and a restrictive crossing on the same cheque.

Since the latest cheques act, bank cheque forms have been printed, by default, with the crossing 'a/c payee only' and it is the addition of these words (plus the effect off the latest act) which restricts a UK Cheque's negotiability, not the mere status of it being a UK Cheque.

How very enlightening, thanks.

That practice must be pretty ancient, though, of banks having names like solicitors' firms, consisting of the partners' names, and abbreviated to "& Co" preceded by the name of the most senior or founding partner. Not many banks have had such names for quite a while, have they? Coutts, perhaps, and Adam; and of course Dawes, Tomes, Mousley, Grubbs FFB.