I have a single shareholder corporation (ABC Inc.--shareholder Mr. Alphabet Soup) that brings checks into the bank made payable to the Corporation. Mr. Soup wants to cash the check, which is over $10,000 triggering a CTR to be filed. Since Mr. Soup is the single shareholder, is this ok to do? We train the staff they should deposit the check then do a withdrawal, unless it's a DBA or Sol-Proprietorship. Mr. Soup was adamant about cashing the check & not having to deposit it. Thanks for the help.

You're going to cash a check made payable to a business entity? No bank I've ever worked at permitted such a practice.

My prior banks never would do it either. However, we are a small bank in a rural area where everyone knows everyone and they have done this for years prior to me working here. I DO NOT agree with any check made payable to a business to be cashed, but some officers are still allowing it bc they do not want to lose the customer. I'm fighting a losing battle! :-(

i love the "don't want to lose a customer argument." my response back to those is normally "no other bank is going to do this" so that negates their argument. and do we want to put the bank at risk because a customer may leave? of course not.

"Since Mr. Soup is the single shareholder, is this ok to do?"

And exactly how does anyone know this for sure. Mr. Soup recently sold 80% of the shares to some other people for $1MM and now he is embezzling money from the company. Which means the bank is now on the hook for it all.

So, Mr. Soup went to all the trouble and expense of forming a corporation to insulate himself from business obligations and maybe for tax purposes, but he still thinks it's his personal cookie jar? If he had a qualified attorney advise him, that attorney would not be pleased with what he's doing. He's endangering that "corporate veil" that separates him from his business debts (or he might be embezzling, as Randy suggests). Or he could be trying to hide business income from -- are you ready? -- the IRS and state tax authorities.

The bank could be on the hook for some of those taxes.

The IRS might lay an administrative summons on the bank asking for copies of all the checks payable to the corporation that you've cashed for Mr. Soup. How's that going to go over in your records research department? Do you even have a way to do that efficiently? Maybe one of those hang-loose officers who've been going along with this over the years will pitch in to help, right?

It's a poor business practice -- plain and simple.

I would like to piggy back on this thread. we have a single member corporation customer with a checking account. The single owner member just died. The attorney handling the member's estate has a check payable to the Corporation that he would like to deposit into the corporation account. However, he would then like to write a check for the balance of the corporation account and apply it to the member's estate. The single member owner was the only signer on the corp. account. Any suggestions how to handle the disbursement of the funds?

No problem with depositing the check. The corporation didn't die. But, with no living authorized signer on the account you have a problem. The attorney can't just snap his fingers and take over the corporation. The personal rep of the estate (the attorney or someone else) will have to arrange for a vote of the board of the corporation (how he gets to that point may vary by state) authorizing the attorney (or someone else) to sign on the account. Then a check can be issued over that signature payable as he or she directs.

Thank you John. we will contact the attorney for Board of Director information