Skip to content
BOL Conferences
Thread Options
#1802752 - 04/09/13 03:54 PM Two companies on one DDA account?
TMatt87 Offline
Diamond Poster
TMatt87
Joined: May 2011
Posts: 1,984
Idaho
Let me preface this by saying I know absolutely nothing about deposit side compliance, so I apologize if this is a stupid question:

Can we have two separate companies on the same DDA account? We are doing a construction loan to a dentist that will also include the purchase of the dental equipment. We require construction draws to be disbursed into a checking account and then cashiers checks used to pay contractors. In this situation, the dentist operates two separate LLCs and wants the real estate portion to be under one company and the equipment under the other. To simplify things, we want to have the same checking account for both purposes. Are there any issues with this?

Thanks for any help.
_________________________
All opinions are my own, not my employer's

Return to Top
Deposits and Payments
#1802761 - 04/09/13 04:03 PM Re: Two companies on one DDA account? TMatt87
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
We require construction draws to be disbursed into a checking account and then cashiers checks used to pay contractors.

Why bother with the checking account?
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1802793 - 04/09/13 04:41 PM Re: Two companies on one DDA account? TMatt87
TMatt87 Offline
Diamond Poster
TMatt87
Joined: May 2011
Posts: 1,984
Idaho
I'm told it has to do with tax issues... 1099s I think. Anyways, that's the way our policy is written.
_________________________
All opinions are my own, not my employer's

Return to Top
#1802805 - 04/09/13 05:06 PM Re: Two companies on one DDA account? TMatt87
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
Well, there are other questions - if the loan is to the dentist, why is the account not in his name. If the loan is to the two entities - how is that possible unless they applied jointly. There is a reason that he has two companies - without a separation of assets and liabilities, it will pierce any corporate veil that he has tried to create.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1802815 - 04/09/13 05:14 PM Re: Two companies on one DDA account? TMatt87
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
Perhaps the loans need to be done separately..one to each LLC for the corresponding purpose (construction and equipment) with separate checking accounts.

To do otherwise defeats the purpose of separate LLCs, as Randy has said above.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top
#1802827 - 04/09/13 05:36 PM Re: Two companies on one DDA account? TMatt87
TMatt87 Offline
Diamond Poster
TMatt87
Joined: May 2011
Posts: 1,984
Idaho
I totally agree, but our commercial lenders like to bundle loans for some reason. I think it is because one of the entities would qualify for SBLF (small business lending fund) credit. I'm not really involved with the transaction, so I don't know the details, but it sounds like the loan officer just needs to separate the loans.
_________________________
All opinions are my own, not my employer's

Return to Top
#1803181 - 04/10/13 02:53 PM Re: Two companies on one DDA account? TMatt87
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Two business entities can open a joint account when they are engaged in a joint venture. The documentation would be somewhat complex and would be a lot to ask of a customer just to be able to use a funding mechanism preferred by a particular officer.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top

Moderator:  John Burnett