A question has come up about CIP. A business that is incorporated opens an account. We verify with the Secretary of State if this business is a legal entity registered in the state.

For CIP purposes, what is required for our staff to verify and what type of documents should we have to proof that we have done CIP properly.

Read your bank's CIP. That shoudl give you your answer and that is what you must follow.

If you are wondering what other bank's have written into their CIP, I would say to get operating agreements of the corp, and if owned by entities, nto people, perhaps the operating agreements of those entities as well-- just to support who you are allowing to transact on the account. Also that paper from the Secretary of State sayign the items were filed with the state.

Thanks. I have read what our CIP policy says and it is not clear. It states "For corporations, partnerships, trusts, and persons other than individuals" documents showing the existence of the entity, such as registered articles of incorporation, a government-issued business license, partnership agreement, or trust instruments." It goes on and says the following may also be taken into consideration and list several things.

This says to me verifying with the secretary of state in that particular state is sufficent. Would that be correct. It that is correct would that all you have to document?

I know of a situation where an existing customer joined with another individual for the purpose of establishing a new business relationship. Each party formed his own LLC and these two LLCs joined together to form another LLC. While the secretary of state shows the existence of the LLC, the bank still does not know the ultimate beneficiary of the account relationship. Further investigation revealed that each individual had originally formed his own LLC; however, the party new to the bank had shifted his LLC ownership to bearer shares in the Country of Panama. This is a classic way the bad guys get into your bank--partner with a good guy.

CIP and CDD work hand in hand to identify our business customers. Obtain articles of inc, partnership agreement, etc. to confirm creation and owners (think of these forms like birth certificates for a formal entity), verify registration (anyone can give you papers) and then follow through to know the ultimate beneficiaries (i.e., owners, principals, etc.).

I'm not certain all my terminology is correct, but I think you get the idea!

BrendaC, being in AL also, how do you verify registration? By phone or is there a website to do this?

Anyone trying to establish what corporate verification processes are available in a particular state should start with a Google search: [state name] and "secretary of state." (It will work for Alabama, but you may have to read, point, and click a bit.)

Would anybody mind sharing their CIP policy with me. When I took over this area, we already had a CIP policy but would like to see what others bank policy says. I believe ours could be improved.

If you would PM me and I will give you my e-mail address

Thanks