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#613669 - 09/15/06 01:30 PM Multiple LLC's on one DDA account
coho Offline
Junior Member
Joined: May 2005
Posts: 40
I have a customer that wants to open one DDA but have three LLC names on the account, along with his own name. He is the only person involved with the LLC's.

Does anyone see a problem with opening them this was as long as we get all the documentation on all the LLC's?

Thanks in advance for your help.

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#613670 - 09/15/06 02:50 PM Re: Multiple LLC's on one DDA account
Tom at HOME Offline
Diamond Poster
Joined: Oct 2005
Posts: 1,139
I don’t see a problem for the bank but I see one for the customer. The problem is called piercing the corporate veil . They may lose one of the benefits of forming an LLC, the protection from personal liability.

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#613671 - 09/15/06 03:33 PM Re: Multiple LLC's on one DDA account
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
The bank could have a problem, too. You want to make certain that checks are deposited to an account in the payee name. How do you police that with a multi-owner account? Multiple commercial owners also causes problems with FDIC insurance coverage. They don't recognize joint owners (for insurance purposes) that are not natural persons.

Besides Tom's suggestion, the customer can also have problems sorting everything out at year end for accounting and tax purposes. Even though he can report single-member LLC earnings on his own 1040, he needs to include a separate schedule for each LLC.

Finally, don't forget that one of your customer's goals may simply be to save on the bank's fees. That may be a good idea for him, but not for you.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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#613672 - 09/15/06 04:32 PM Re: Multiple LLC's on one DDA account
coho Offline
Junior Member
Joined: May 2005
Posts: 40
Thank You Tom & John.

You gave me some great information to go back to our customer with.

I appreciate the help.

Nancy

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