Banking · Company Accounts

Evaluate the following statements regarding the account opening and operations for Joint Stock Companies. Statement 1: When a company is in the process of being incorporated, a bank cannot open a regular current account in the company's name because the company has not yet attained legal personhood through a Certificate of Incorporation; however, the bank can open a temporary account to receive share application money which is then converted once the incorporation process is complete. Statement 2: The doctrine of Indoor Management (Turquand's Rule) protects the bank when dealing with a company, implying that the bank is not required to investigate whether the company's internal procedures, such as the proper passing of a board resolution or the quorum of a meeting, were strictly followed before the bank acts on a resolution signed by the Company Secretary. Statement 3: If a company's Memorandum of Association (MOA) does not explicitly grant the company the power to borrow money, any loan or overdraft granted by the bank to the company would be considered 'Ultra Vires' the company and would be legally void, making it impossible for the bank to recover the debt from the company's assets or sue the company for the balance. Which statement accurately summarizes the liability of a bank when a company exceeds its constitutional powers as defined in the statements above?