TYPES OF BORROWERS

a. Minor : Minors are people who have not yet reached

the age of majority according to the law of their
province (usually 18 or 19) . Because minors have
less bargaining power than adults, as a general rule,
contracts made by minors are not enforced against
them but are enforceable by them.
b. Major:  A person will become major at the age
of 18 whether guardian is natural or appointed by a
court of law.
Guardians: There can be three types of
guardians.
 Natural guardians like father, mother.
 Testamentary Guardian: A Guardian
appointed by will (Vasiyat) . Natural guardian
may appoint somebody to act as guardian
after his or her death through will. But such
guardian will come into picture only on the
death of natural guardian (in case of Hindus
on the death of father as well as mother).
 Legal guardians: A Guardian appointed by
Court. If neither natural or testamentary
guardian then appointed by court.
When guardian of a Hindu minor ceases to be a
Hindu or he becomes a hermit or sanyasi he
ceases to be natural guardian.
c.  Illiterate Persons
d. An illiterate person is competent to contract like any
other person.
e. Cheque book is not issued to illiterate depositor for
cash payments.
f. Cheque book can be issued for making statutory
payments, post dated cheques for repayment of
installments of loan. In such cases, the cheques will
be crossed account payee and thumb impression of
the illiterate depositor will be verified on such cheque
at the time of issue of cheque book by competent
authority of the bank.

 d) Limited Companies:
 A limited company is an artificial person with
perpetual succession incorporated under the Companies
Act.
 Company is a legal person, created through process
of incorporation for which Registrar of Companies
issues Certificate of
 Incorporation.
 Shareholders are owners of the Company and
directors are agents of the company to manage company.
 A limited company may be private limited or public
limited.
 Members in a private limited company: minimum 2;
maximum excluding employees can be 50.
 Members in a public limited company: minimum 7
and there is no ceiling on maximum number.
 Number of Directors: A private limited company
should have minimum 2 directors whereas a public
limited company should have minimum 3 directors. No
limit on maximum number of directors. In a public
limited company, if directors are more than 12,
permission from central government required.
 Public company: When minimum 51% shares with
government.

e) Married women
An married woman can enter into any valid contract
and can acquire, hold and even dispose of the property
belonging to her absolutely. There is no distinction
between a man and female (Spinster, Widow or married
woman) as far as contractual capacities are concerned.
She cannot bind her husband unless she acted as agent
or had borrowed for necessities of life or for household.
Husband can escape if he proves that there was no
necessities or she was forbidden to borrow. In case of
overdraft, the banker has no remedy against her if she
has no separate property or the property is settled upon
her in such a way that she can use the income only and
cannot touch the corpus, nor anticipated income. In case
of overdraft there is no personal remedy against a married
woman as she cannot be committed to prison for non-
payment of judgment debt. In short, the banker avoid
overdraft, unless, securities are offered belonging to her
absolutely.

F)Attorney:
An attorney, also called a  lawyer ,
advises clients and represents them
and their legal rights in both criminal
and civil cases. This can begin with
imparting advice, then proceed with
preparing documents and pleadings
and sometimes, ultimately, appearing in
court to advocate on behalf of clients.
G)Agent:
An agent is a person who acts in the name
of and on behalf of another, having been
given and assumed some degree of
 authority to do so. The most common
example of this is in the employer-
employee relationship. The employer is
authorizing the employee to complete work
on their behalf. The employee
is representing the employer in this
relationship. This also means that the
employer is liable for any inabilities to
complete work. If the employee acts in a
way that is poorly representative of the
business, it is possible that the principal
could be liable for the actions because they
agreed to the agency agreement.

H) Proprietorship firm:
A sole proprietorship firm is the simplest
business form under which one can operate
a business. The sole proprietorship is not a
legal entity. It simply refers to a person who
owns the business and is personally
responsible for its debts.
I) Statutory Company:
A statutory company definition is defined
as a company that is created by a Special
Act of the Parliament and it provides
services of value to the public. The Act
defines its powers and functions, rules and
regulations governing its employees and its
relationship with government departments.

J) Holding Companies:
A holding company is a company that
doesn’t conduct any operations, ventures, or
other active tasks for itself. Instead, it exists
for the purpose of owning assets. In other
words, the company does not engage in the
buying and selling of any products and
services. Instead, it was formed so that it
gains control over one or more companies.
K) Government Companies:
Government Company is a company or an
organization in which at least 51% of the paid up share
capital is held by the central government or the state
government or partly by both central and state
government .