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Is there a law that requires us to have all of the members of a member-managed LLC as signatories for the LLC’s deposit account? For example, one LLC customer wants only two of its four members to have signing authority. – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

Is there a law that requires us to have all of the members of a member-managed LLC as signatories for the LLC’s deposit account? For example, one LLC customer wants only two of its four members to have signing authority.

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No. We are not aware of any law that would require you to include all of the members of a member-managed LLC on the LLC’s signature card.

The Illinois Limited Liability Company Act provides that every member of an LLC has authority to act on behalf of the LLC, “including the signing of an instrument in the company’s name.” However, if the LLC has indicated that certain members are not authorized to sign for the LLC — for example, by omitting those members from the signature card — then your institution should not accept the signature of those non-signatory members.

For resources related to our guidance, please see:

  • Limited Liability Company Act, 805 ILCS 180/13-5(a)(1) (“Each member is an agent of the limited liability company for the purpose of its business, and an act of a member, including the signing of an instrument in the company's name, for apparently carrying on, in the ordinary course, the company's business or business of the kind carried on by the company binds the company, unless the member had no authority to act for the company in the particular matter and the person with whom the member was dealing knew or had notice that the member lacked authority.”)