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#66789 - 03/11/03 06:08 PM NOW ACCTS.: Sole proprietor LLC??
Bartman Offline
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Bartman
Joined: Oct 2000
Posts: 1,191
Springfield
In conducting a NOW account review, I came across an account entitled (name changed to protect privacy) "Joe's Realty LLC".

There's only one signer, and one signature on the corporate resolution. The W-9 certification has Joe's personal name in the first line, and the business name as "Joe's Realty LLC". I have a sole proprietorship resolution of authority that indicates the business name as above - makes it smell like any other DBA account. I have no LLC paperwork.

Is this a sole proprietorship that can earn interest on checking under Reg. D? Or does the semi-/un-documented "LLC" designation push this into the "thou shalt not pay interest" category?

I frankly can't tell right now whether to train my customer, my staff, or both...
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#66790 - 03/11/03 06:17 PM Re: NOW ACCTS.: Sole proprietor LLC??
Skittles Online
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Skittles
Joined: Sep 2002
Posts: 13,965
TN
I verify how they are recorded with the secretary of state. That's what I use, not the resolution. As a matter of fact I'm working on that audit currently.
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#66791 - 03/11/03 06:31 PM Re: NOW ACCTS.: Sole proprietor LLC??
Andy_Z Online
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Andy_Z
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Here is a definition of an LLC: The limited liability company or LLC is not a partnership or a corporation. An LLC is a distinct type of business that offers an alternative to partnerships and corporations, by combining the corporate advantages of limited liability with the partnership advantage of pass-through taxation. I don't know if this will vary from state to state?

Since its documents are filed with the state, you should be able to verify the name is not fictitious. Using a name without authorization may be a crime and subject the user to a fine.

I'd do more research before I'd make the call. But I don't believe it comes under a sole-prop., I believe it is taxed as a partnership and I don't believe a NOW is authorized.
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AndyZ CRCM
My opinions are not necessarily my employers.
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#66792 - 03/11/03 07:17 PM Re: NOW ACCTS.: Sole proprietor LLC??
Bartman Offline
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Bartman
Joined: Oct 2000
Posts: 1,191
Springfield
Turns out Operations had LLC paperwork filed with the state in Nov. 98. My determination - for-profit LLC equals no interest on checking. The branch has some explaining to do. Thanks for your input!
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#66793 - 03/11/03 10:23 PM Re: NOW ACCTS.: Sole proprietor LLC??
Andy_Z Online
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Andy_Z
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That is why we audit!
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AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#66794 - 03/11/03 10:25 PM Re: NOW ACCTS.: Sole proprietor LLC??
Love those Regs Offline
Gold Star
Joined: Apr 2002
Posts: 296
Southern State
Just to let you know, the FDIC just completed an exam and said "No LLC should have a NOW account." We had one old account that had been changed to an LLC that was caught - but only that one. I gave them the story about how the state viewed the account and basically they reiterated that an LLC can not have a NOW - end of story.
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