One of our customers sold its business. The CPA advised the buyer (which is keeping the business account at our bank) to retain its EIN but change the corporate name. We have obtained amended articles of incorporation, letters sent to the IRS regarding the name change using the same EIN, and an Illinois Secretary of State filing for the amended business name. We don’t have confirmation from the IRS. Should we obtain any additional documents from the customer?

We recommend treating the account as a new business account and documenting the business’ new ownership and name by collecting any documents prescribed by your policies and procedures when opening a new business account. This may include the business’ articles of incorporation, bylaws, a corporate resolution authorizing the organization to open an account, etc.

The Customer Identification Program (CIP) regulations require you to collect and verify certain identifying information, including an Employer Identification Number (EIN) from every business customer, as well as its name and address (a principal place of business, local office or other physical location). You may verify this information by reviewing the customer’s articles of incorporation or by reviewing a public database, such as the Illinois Secretary of State’s website, or by reviewing financial statements.

We do not believe that obtaining additional documents from the IRS confirming the new business name is necessary, unless such documentation is required by your account opening policies and procedures or is warranted due to a higher risk rating for this particular customer.

For resources related to our guidance, please see:

31 CFR 1020.220(a)(2) (“Customer Identification Program: minimum requirements . . . . (2)(i)(A) In general. . . . the bank must obtain, at a minimum, the following information from the customer prior to opening an account: (1) Name; . . . (3) Address, which shall be: . . . (iii) For a person other than an individual (such as a corporation, partnership, or trust), a principal place of business, local office, or other physical location; and (4) Identification number, which shall be: (i) For a U.S. person, a taxpayer identification number; . . .”)

31 CFR 1020.220(a)(2) (“Customer Identification Program: minimum requirements . . . . (2)(ii)(A) Verification through documents. For a bank relying on documents, the CIP must contain procedures that set forth the documents that the bank will use. These documents may include: . . . (2) For a person other than an individual (such as a corporation, partnership, or trust), documents showing the existence of the entity, such as certified articles of incorporation, a government-issued business license, a partnership agreement, or trust instrument.”)

31 CFR 1020.220(a)(2) (“Customer Identification Program: minimum requirements . . . . (2)(ii)(B) Verification through non-documentary methods. For a bank relying on non-documentary methods, the CIP must contain procedures that describe the non-documentary methods the bank will use. (1) These methods may include contacting a customer; independently verifying the customer’s identity through the comparison of information provided by the customer with information obtained from a consumer reporting agency, public database, or other source; checking references with other financial institutions; and obtaining a financial statement.”)

BSA/AML Examination Manual — Business Entities (Domestic and Foreign) — Overview (“When opening an account for a customer that is not an individual, banks are permitted by 31 CFR 1020.100 to obtain information about the individuals who have authority and control over such accounts in order to verify the customer’s identity (the customer being the business entity). Required account opening information may include articles of incorporation, a corporate resolution by the directors authorizing the opening of the account, or the appointment of a person to act as a signatory for the entity on the account.”)

BSA/AML Examination Manual — Customer Due Diligence — Overview (“Based on the customer risk profile, the bank may consider obtaining, at account opening (and throughout the relationship), more customer information in order to understand the nature and purpose of the customer relationship, such as:

Source of funds and wealth.

Occupation or type of business (of customer or other individuals with ownership or control over the account).

Financial statements for business customers.

Location where the business customer is organized and where they maintain their principal place of business.

Proximity of the customer’s residence, place of employment, or place of business to the bank.

Description of the business customer’s primary trade area, whether transactions are expected to be domestic or international, and the expected volumes of such transactions. Description of the business operations, such as total sales, the volume of currency transactions, and information about major customers and suppliers.”)