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...

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.

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.

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!

That is why we audit!

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.