Could someone please tell me if bank's are required by law to obtain an assumed name certificate when opening an account for a sole proprietorship? We are having a big discussion on if their surname is in the assumed name if you have to have one.

In Section 36.01 of the Texas Business & Commerce Code it defines an "Assumed name" as a name that does not include the surname of the individual.

It also requires that anyone doing business under an assumed name must file in each county where such business is located. (See section 36.10.) Such filing lasts for a 10-year period. (See section 36.13.)

Failure to file could be a Class A misdemeanor. (See section 36.26.)

I know of no requirement for a bank to maintain a copy of such filing but it is important for the bank's customer to so file. I think you are doing your do diligence by requiring such filing when the individuals last name is not included in the assumed name.

In order to comply with BSA's CIP requirements, you should maintain evidence that you at least saw the relevant document. Making a copy is the easiest method but not specifically required.

Patricia,

Under the CIP reg, I have read it I don't know how many times and don't see anything about a sole proprietorship. In one section it talks about getting documents showing the existence of the entity, such as certified articles of incorporation, a government-issued business license, a partnership agreement or trust instrument for corporations, partnerships and trust but it does not mention sole proprietorships. Do sole proprietoships fall under this category or do they fall under an individual? This is soo confusing.

Your bank's CIP procedures have to address all of the types of customers with which the bank chooses to do business. This would include someone conducting business under a "dba" or fictitious name. As such, your bank's CIP procedure must address that situation and indicate within your procedures the type of documentation the bank is going to require to ensure they are dealing with an identified entity. Bank's typically address "dba"s within their business account procedures.

rlcarey, Thanks for your input. Out Business account procedures say we must get an assumed name certificate but then we have others (such as the BSA officer and other Vice Presidents) saying if the surname is in the dba then you don't have to an assumed name certificate. I've got the answer on the surname stuff but the President is wanting to know if by regulations we are required to get this or is it up to our bank to decide. Most of our customer's are farmers and self employed.

As with all the CIP procedures, it is really up to the bank to decide what procedures are adequate for identifying your customers - outside of the required minimums.