Topic: Account Titling
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Does Illinois law allow a sole proprietorship account to be titled in the name of two spouses? If so, are the spouses co-owners of the account? Can the sole proprietorship account list a payable-on-death (POD) beneficiary?
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We are not aware of any state law prohibition against a sole proprietor account being titled in the name of two spouses. Under the Internal Revenue Code, two spouses who run a business together may file a tax return as a sole proprietorship. The spouses will co-own the sole proprietorship account if they both sign…
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We have a business customer that operates a farm management limited liability company. The company receives lots of checks payable to its clients that it would like to deposit, so the company wants to open a “for the benefit of” (FBO) account for each client. The clients would have no authority on the accounts, and would sign a limited power of attorney giving the company permission to deposit checks made out to them. Is this compliant with Illinois laws? Also, does the designation “FBO” have any bearing on the account itself?
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We are not aware of any Illinois law that expressly relates to the “FBO” designation for deposit accounts. However, this designation is relatively common, and in similar situations, some banks do choose to add the FBO designation to the account title for various reasons. The FBO designation is relevant in determining whether an account is…
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Does Illinois require corporations and limited liability companies to apply to use an assumed name? We have a corporate customer that has not submitted an application but has requested to present checks in an assumed name.
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Corporations and LLCs are required file an “application” with the Secretary of State before transacting business in Illinois under an assumed name (although the assumed name may be used as of the date the “application” is filed). Before permitting your customer to present checks made out to an assumed name, you may wish to request…
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We have a deposit account managed by our trust department that lists our bank as agent under a power of attorney. Can a bank with trust powers serve under a power of attorney for the account? If so, how should the account be titled?
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Yes, a bank may serve as an agent for a deposit account under a power of attorney for property — provided that the power of attorney (POA) document includes the power to execute financial institution transactions. We note that in a 1991 Interpretive Letter, the Office of the Commissioner of Savings and Residential Finance (now…
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We have a corporate customer that opened an account titled “John Doe Corporation d/b/a John Doe Systems.” This customer attempted to deposit a check made out to “John Doe Enterprise” into that account. Should we accept the deposit into that account?
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Before you deposit checks made out to “John Doe Enterprise” into the “John Doe Corporation, d/b/a John Doe Systems” checking account, you should confirm whether John Doe Enterprises is an assumed corporate name for John Doe Corporation. It is possible for a corporation to have more than one assumed name, provided the corporation filed a…
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What needs to be in the title of a minor account? Does every minor account need a custodian?
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The title requirement depends on the type of account. One type of custodial account for a minor is established under the Uniform Transfers to Minors Act (UTMA). Such accounts must be designated in the name of the minor’s account custodian followed by the words “as a custodian for ………….. (name of minor) under the Illinois…
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How should we title a deposit account for a land trust that rents out the property held in the trust under a d/b/a name?
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We are not aware of any specific account titling requirements for a land trust operating under a d/b/a name. One possible way to title the account is John Doe Land Trust, by [Corporate Fiduciary] as Trustee, D/B/A John Doe Rental Properties. Also, we recommend obtaining the land trust’s assumed name certificate issued by a county…
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We have a customer who wants to establish an account for an unincorporated joint venture operated by two businesses and two individuals. What account documentation should we obtain when opening the account?
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Based on these facts, the joint venture should be treated as a partnership and treated accordingly. Under Illinois law, any two or more persons who operate an unincorporated business together (that is, who “carry on as co-owners a business for profit”) are automatically considered to be a partnership, even without a written agreement or a…