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#2269753 - 04/28/22 01:10 PM Beneficial Ownership
praBSA Offline
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Joined: Aug 2018
Posts: 348
Customer's business documents state ownership is:

ABC Capital LLC owned by XYZ Trust Co FBO ABC Properties LLC 401K Plan - 100% Owner

I think the customer might have setup his business improperly, which might be the issue confusing me. What the customer stated is that the business was setup to manage investments of the 401k plan and XYZ Trust Co is just a custodian and not an owner of the business, contrary to what the documents say.

Who's the owner here? I think it's the 401k plan entity and we just need a trustee listed on BO of ABC Capital, or at least that was the intent of the customer and his business documents he just recently setup read incorrectly.

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#2269760 - 04/28/22 01:36 PM Re: Beneficial Ownership praBSA
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,220
Galveston, TX
Might not be able to tell without an operating agreement and other corporate docs from ABC Capital LLC
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2269762 - 04/28/22 01:52 PM Re: Beneficial Ownership praBSA
praBSA Offline
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Joined: Aug 2018
Posts: 348
That is directly from the Operating Agreement:

"Membership:
XYZ Trust Company, for the benefit of ABC Properties LLC 401K Plan - 100% Ownership"

Signed by:
Member - XYZ Trust Co officer
Manager (ABC Properties owner)
Plan Owner (ABC Properties owner)

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#2269811 - 04/28/22 11:41 PM Re: Beneficial Ownership praBSA
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,220
Galveston, TX
Get your legal counsel involved. When you do not understand the legal set-up and whether it is right, I would just pass. A 401K Plan owning a business entity is not a usual feature of a 401K plan and if you are not a boutique bank that specializes in servicing this sort of customer, send them down the road.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2269831 - 04/29/22 04:00 PM Re: Beneficial Ownership praBSA
ACBbank Online
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ACBbank
Joined: Jul 2006
Posts: 4,344
New York City
You need to ask your legal counsel about this. I have seen situations like this, but we always fall back on our attorney's opinion.
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#2269847 - 04/29/22 06:43 PM Re: Beneficial Ownership praBSA
praBSA Offline
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Joined: Aug 2018
Posts: 348
We decided to pass on it. The setup was weird. We are a two state bank. The customer lived here, but the business was registered in another state, with a physical address in a second state, with the plan manager in a 3rd state, buying real estate in a 4th state. We don't typically go out of our way to bank out of state entities, and not understanding the structure, we felt it best to not onboard them. Thanks for the feedback.

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#2269910 - 05/02/22 04:37 PM Re: Beneficial Ownership praBSA
compgal21 Offline
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Joined: Jan 2021
Posts: 45
Yeah, I can't say I blame you that whole mess screams red flag.

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#2269961 - 05/03/22 11:53 AM Re: Beneficial Ownership praBSA
praBSA Offline
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Joined: Aug 2018
Posts: 348
They registered a complaint. .eyeroll

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