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#34431 - 09/25/02 01:02 PM DBA Accounts
LinMarie Offline
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LinMarie
Joined: Nov 2001
Posts: 243
I have searched thread on this issue but have not found my answer.

Is it a law that all checks payable to a dba be deposited into the dba account or is it possible for the owner to cash the checks or deposit them into a personal or other business account?

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General Discussion
#34432 - 09/25/02 01:18 PM Re: DBA Accounts
IUalum Offline
Platinum Poster
IUalum
Joined: Mar 2002
Posts: 942
Kentucky
It's not a law but just a really good business practice to not run these checks through a personal account or give cash back on them. Business owners will do this sometimes to evade taxes. If your customer insists on cash, have him deposit the checks to the business account and write a check for the amount of cash he wants. It gives us (and regulators) a paper trail.
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Opinions expressed are mine and not necessarily that of my employer.

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#34433 - 09/25/02 01:36 PM Re: DBA Accounts
LinMarie Offline
100 Club
LinMarie
Joined: Nov 2001
Posts: 243
Is there exposure for the bank?

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#34434 - 09/25/02 02:03 PM Re: DBA Accounts
Al Miller Offline
Diamond Poster
Al Miller
Joined: Oct 2000
Posts: 2,416
Pleasanton CA USA
How about the cost of an IRS subpoena for every check cashed by the proprietor. They will only pay per copy, not per hour of searching.
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Al Miller, CRCM
Opinions expressed are my own and not necessarily shared by my employer.

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#34435 - 09/25/02 02:17 PM Re: DBA Accounts
SMQ, CRCM Offline
Power Poster
SMQ, CRCM
Joined: Apr 2001
Posts: 4,828
Between the lines
Let's set the scenario that we see most often:

Account styled -- Cathy Customer
Check payable to -- Cathy's Catering

Now, if you cash the check, or deposit the check to Cathy's account; how do you know that there is not another Cathy's Catering in New York? Maybe someone just looked up the address in the phone book and sent a check. Of course, the lenders generally say "We know who we are dealing with" ----- until there is a problem!
You can protect yourself and keep your options open by styling the account Cathy Customer dba Cathy's Catering, get the resolution, and have the customer deposit all checks to Cathy's Catering and then cash her own check. Also, the customer can still order their checks with only their name (Cathy Customer) if they so desire. This is what we do and the customers generally accept it once they realize that they do not have to put the business name on the checks --- most of them order two checkbooks, one with and one without.
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