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#385528 - 07/13/05 08:30 PM Right to Offset
Midwest Banker Offline
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Joined: Nov 2004
Posts: 349
Cheeseland
Any help on this post would be GREATLY appreciated. We have an LLC that is currently overdrawn and want to offset this amount with one of the signers personal accounts. Is this permissible in WI? Our deposit account agreement, which is the same for both business and personal only addresses IRA's, credit cards, and representative capacities. What am I missing?

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#385529 - 07/13/05 09:01 PM Re: Right to Offset
rainman Offline
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rainman
Joined: Nov 2004
Posts: 3,076
In order to "offset" you have to have a debt that's owed by A to B, and a debt that's owed by B to A. One debt gets offset against the other.

In this case, you have a deposit debt that's owed by Bank to Signer. But the debt you want to offset is owned to Bank by LLC, not signer. Because the debts aren't between the same parties, there's no right of offset.

Now if Signer has guaranteed all of LLC's obligations (or at least overdrafts) to Bank, then you have mutual obligations to set off.
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#385530 - 07/13/05 09:44 PM Re: Right to Offset
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,629
Cape Cod
Treat this the same way you would treat it if the LLC were a corporation on which there is a signer who has a separate personal account with you. There's no offset right here.
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#1014952 - 08/07/08 05:52 PM Re: Right to Offset John Burnett
MadisonCali Offline
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Joined: Jun 2006
Posts: 2,515
What about if the only signer of the corporation is the president/owner? Can you offset a negative balance in that corporation's account with funds from his personal?
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#1015030 - 08/07/08 06:33 PM Re: Right to Offset MadisonCali
Elwood P. Dowd Offline
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Elwood P. Dowd
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Posts: 21,939
Next to Harvey
No, for the reasons set out above. The corporation and the individual are two different persons under the law.

If John owes you money you cannot take it out of Rainman's account.
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#1015043 - 08/07/08 06:40 PM Re: Right to Offset Elwood P. Dowd
MadisonCali Offline
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Joined: Jun 2006
Posts: 2,515
Thanks!
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