NOW Acct for Sole Proprietorship DBA a Corporation
by John Burnett, BOL Guru Guru Bio
Question: One of our customer service representatives opened a sole proprietorship account recently and titled it "Sole Proprietorship DBA Corporation". Corporation is listed as the owner of the sole proprietorship on the fictitious name registration. The account that was opened is a NOW account. I know that a sole proprietorship can have a NOW account, but in this case I am not comfortable with it. I also question whether the account is titled properly. Any insight would be appreciated.
Answer: A sole proprietorship by definition is owned by an individual, not by a corporation. What you appear to be dealing with is a corporation that is using a fictitious name, and someone (the customer or your CSR) has confused the common abbreviation "DBA" with the term "sole proprietorship." The account probably should be titled "Corporation DBA [Fictitious Name]," and the NOW account should be converted to a demand deposit account (non-interest bearing checking account) or to a combination of a demand deposit account and some form of business savings account.
Don't forget to ensure that you are using the correct EIN on the account, that the CIP information you have on file includes information on the corporation, and that you have the proper corporate documentation (corporate resolution, articles of incorporation or other documents you normally require for corporate accounts) in file. It's not uncommon that "DBA" and "sole proprietor" are thought to be the same thing. They most definitely are not. Your CSRs (at least one of them) should get some refresher training or information that will distinguish between the two.
BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all banking professionals. Support our advertisers and sponsors by clicking through to learn more about their products and services.
Print Friendly!
Email This Article!
Discuss NOW!
