IBA Compliance Connection

Your go to source for compliance!

One of our customers is a corporation with its own employer identification number that is owned by a single individual who is also the only member of its board. If this individual passes away, can the corporation’s authorized signers still transact business on the corporation’s bank account? Additionally, the individual is asking how she can simplify the process of allowing her heirs to continue to transact business on the account after she passes away. What advice should we give her?

—

by

admin

Yes, we believe that the corporation’s authorized signers may continue transacting business on the corporation’s bank account, even after the corporation’s sole owner and board member passes away.  

The Illinois Business Corporation Act states that “the duration of a corporation is perpetual unless otherwise specified in the articles of incorporation.” This means that a corporation normally continues to exist even after a sole owner’s death, and until the bank is notified otherwise, the account and its authorized signers should remain valid. However, this does not mean that the authorized signers cannot be changed or removed later by way of a corporate resolution.

Additionally, we note that we do not believe that your bank should be providing estate planning advice to your customer, other than confirming that authorized signers may continue to transact business on the corporation’s bank account even after the corporation’s sole owner passes away. Legal advice regarding estate planning should instead be provided by legal counsel.

For resources related to our guidance, please see:

  • Business Corporation Act, 805 ILCS 5/2.10(d) (“The duration of a corporation is perpetual unless otherwise specified in the articles of incorporation.”)