Can an LLC that is 100% owned by a corporation, uses the same federal employer identification number as the corporation, and is considered a disregarded entity for tax purposes use the same demand deposit account as the controlling corporation? The account would be titled in the corporation’s name, with the LLC named as a “doing business as” on the account, and we would allow the customer to deposit items payable to either the LLC or the corporation into the account.

We believe that a corporation and its wholly-owned subsidiary LLC could operate under the same bank account. However, we do not recommend designating the LLC as a “doing business as” name on the account — which we would view as inaccurate. Instead, we believe it would be accurate to title the account in both the corporation and LLC’s names.

While corporations may transact business in Illinois under an assumed name by filing an application with the Secretary of State, corporations are prohibited from adopting an assumed name that matches an existing LLC’s name. Consequently, we do not believe that the corporation could adopt an assumed name to do business under the LLC’s name. Because the LLC will be operating under its own name in using the account, we recommend reflecting that fact in the account titling and in your records.

For resources related to our guidance, please see:

IRS, Limited Liability Company (LLC) (“Depending on elections made by the LLC and the number of members, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC’s owner’s tax return (a ‘disregarded entity’). . . . For income tax purposes, an LLC with only one member is treated as an entity disregarded as separate from its owner, unless it files Form 8832 and elects to be treated as a corporation. However, for purposes of employment tax and certain excise taxes, an LLC with only one member is still considered a separate entity.”)

IRS, Single Member Limited Liability Companies (“A single-member LLC that is a disregarded entity that does not have employees and does not have an excise tax liability does not need an EIN. It should use the name and TIN of the single member owner for federal tax purposes.”)

Business Corporation Act, 805 ILCS 5/4.15(a) (“A domestic corporation . . . may elect to adopt an assumed corporate name that complies with the requirements of paragraphs (2), (3), (4), (5), and (6) of subsection (a) of Section 4.05 of this Act with respect to corporate names.”)

Business Corporation Act, 805 ILCS 5/4.05(a)(3) (“The corporate name of a domestic corporation or of a foreign corporation organized, existing or subject to the provisions of this Act: . . . Shall be distinguishable upon the records in the office of the Secretary of State from the name or assumed name of any domestic corporation or limited liability company organized under the Limited Liability Company Act. . . .”)

Limited Liability Company Act, 805 ILCS 180/1-10(d) (“The name shall be distinguishable upon the records in the Office of the Secretary of State from all of the following: . . . . (5) Any corporate name or assumed corporate name of a domestic or foreign corporation subject to the provisions of Section 4.05 of the Business Corporation Act of 1983 or Section 104.05 of the General Not For Profit Corporation Act of 1986.”)