Thread Options
#542913 - 05/04/06 01:07 AM Associations - documentation required
loyo111 Offline
100 Club
Joined: Mar 2006
Posts: 102
Miami
We have a client asking a domestic bank to open a checking account for an association he's made with his wife. What type of documentation should we be expecting to see considering that an association technically has no legal structure?

Return to Top
BSA/AML/CIP/OFAC Forum
#542914 - 05/04/06 01:31 AM Re: Associations - documentation required
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,910
Galveston, TX
If the entity has no legal structure it cannot be done.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#542915 - 05/04/06 01:49 PM Re: Associations - documentation required
Ted Dreyer Offline
Diamond Poster
Ted Dreyer
Joined: Apr 2001
Posts: 2,245
It's true that the association doesn't exist as a legal entity, but you can still open the account. The CIP regulations say that:

"(3) (i) Customer means:
(A) A person that opens a new account; and

(B) An individual who opens a new account for:
(1) An individual who lacks legal capacity, such as a minor; or
(2) An entity that is not a legal person , such as a civic club."

You just do CIP on the person opening the account.

Return to Top
#542916 - 05/04/06 02:37 PM Re: Associations - documentation required
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,910
Galveston, TX
Ted - this is true and I totally agree it is appropriate to follow those guidelines for civic clubs, etc. But an "association" with his wife? What's that all about and who ever heard of such a thing. IMHO - Sounds like something the bank should not be involved with. If they want to "do business" as an "assocation" - form an entity. I wouldn't bank them.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#542917 - 05/04/06 08:44 PM Re: Associations - documentation required
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
My "smell test" is more dear to me than the CIP requirements. Whatever H&W are doing (probably something the IRS would not approve of) they can do somewhere else.
_________________________
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
#542918 - 05/04/06 09:27 PM Re: Associations - documentation required
Ted Dreyer Offline
Diamond Poster
Ted Dreyer
Joined: Apr 2001
Posts: 2,245
Randy: I was just giving an answer to the initial question about what documentation would be required on such an account.

I would think that under Customer Due Diligence the bank would inquire about the purpose of the account (and the reason for the "association") and determine whether it sounded suspicious on the basis of the answer.

Return to Top
#542919 - 05/05/06 02:11 AM Re: Associations - documentation required
loyo111 Offline
100 Club
Joined: Mar 2006
Posts: 102
Miami
Gentlemen, the H & W are supposedly going to be repairing homes for Lennar and they're supposedly retired. It seemed a bit odd and we'll pry a bit more but he's agreed to have the "association" registered in Florida. Not quite sure how much that will accomplish.

Return to Top
#542920 - 05/05/06 07:56 AM Re: Associations - documentation required
Princess Romeo Offline

Power Poster
Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

Return to Top
#542921 - 05/05/06 11:32 AM Re: Associations - documentation required
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
The Florida Department of State's great web site, Sunbiz, doesn't provide for registration of associations. Under "choosing a legal structure" it lists sole proprietorships, partnerships, LLCs and corporations as the possibilities.

What you may end up with is a copy of a fictitious name registration, "H & W Association." That will not establish the organization as a legal entity. It will simply indicate H & W are doing business under a fictitious name.

Return to Top

Moderator:  Andy_Z