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Which documents should our bank require when a customer opens a corporate account? – IBA Compliance Connection

IBA Compliance Connection

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Which documents should our bank require when a customer opens a corporate account?

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The Customer Identification Program (CIP) regulations provide specific guidance regarding documentation for new corporate accounts. CIP regulations require you to collect 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 also must verify the existence of the corporate entity through documentary or non-documentary methods. Documentary methods may include reviewing certified articles of incorporation, a government-issued business license, a partnership agreement, or trust instrument. When opening an account for a foreign business that does not have an EIN, the bank must request government-issued documentation certifying the existence of the business. In addition, for both foreign and domestic customers, the FFIEC’s BSA/AML Examination Manual recommends that you obtain a corporate resolution by the directors authorizing the opening of the account and the appointment of one or more persons to act as a signatory for the entity on the account.

Non-documentary methods of verification may include comparing the customer’s information with a public database (like the Secretary of State website), checking references with other financial institutions, and reviewing a financial statement. You also can call the customer’s principal place of business to confirm information about the corporate authorizations.

You also may want to collect information from a corporate account’s authorized signers, particularly when the customer presents a higher risk or you cannot verify the customer’s identity using documentary or non-documentary methods.

Finally, we note that it is customary for commercial account agreements to require a corporate customer to remain in good standing under applicable laws. Our impression is that while most banks do not actively monitor the legal status of their corporate customers, when they do discover a problem with the legal status of a corporate customer, they bring that issue to the customer’s attention. In most cases, the customer quickly resolves the issue.

For resources related to our guidance, please see: