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#699848 - 03/12/07 04:28 PM
NOw eligibility quest.
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Joined: Apr 2005
Posts: 4,013
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I know that sole props can have nows, as well as an individual that has/is a d/b/a. What about 2 or more individuals that also operate a d/b/a?
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#699850 - 03/12/07 04:28 PM
Re: NOw eligibility quest.
Trees
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TN
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Two or more individuals cannot be a 'sole' proprietorship. They may have an informal partnership, which is ineligible for a NOW account.
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#700039 - 03/12/07 07:35 PM
Re: NOw eligibility quest.
Skittles
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The only two individuals are a "he and she" sole prop. Toss in the dba and I believe you are looking at a business account and as Skittles noted, no can do.
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#700090 - 03/12/07 08:08 PM
Re: NOw eligibility quest.
Andy_Z
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Thanks for clarifying the sole props. Now, I looked at 204.13 of Reg D and they mention OK for dbas, however, it appears to imply solely owned dbas. I have some accounts that are dbas and for all intents and purposes they are complex structure outfits but with dba papers. So, should they get my NOWS or not. I'm looking for one of those shades of gray explanations. thanks
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#700111 - 03/12/07 08:30 PM
Re: NOw eligibility quest.
Trees
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Joined: Sep 2001
Posts: 6,029
Sweet Home AL
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A formal entity (corp, partnership, LLC) operated for profit cannot have a NOW account. The only exception would be those companies that maintain accounts for the benefit of a person or persons that qualify for a NOW.
For example, a property manager (ABC Company, Inc. DBA Apartment Helpers) may have a NOW account to house monies for individual renters' security deposits. ALL the money in the account must belong to individuals (no businesses). The same property manager cannot have a NOW for their own money, such as their operating account.
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#700453 - 03/13/07 04:01 PM
Re: NOw eligibility quest.
David Dickinson
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Hey David, I'm a bit confused. i have some businesses (making $$$$) that have XYZ service center, dba XXX as their name. I thought as long as they are a dba the business can have a NOW. Am I wrong???
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#700615 - 03/13/07 06:22 PM
Re: NOw eligibility quest.
Trees
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Galveston, TX
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"dba" has nothing to do with NOW account eligibility. A sole proprietor with a "dba" can have a NOW - but any other for profit entity can not. It comes down to who the funds benefit. In a sole proprietorship - they benefit an individual - who is an eligible entity for a NOW account.
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#706829 - 03/26/07 08:52 PM
Re: NOw eligibility quest.
David Dickinson
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Thank you guys. It is much more clear to me...out of the gray and into the blue.
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#710062 - 04/02/07 07:45 PM
Re: NOw eligibility quest.
Trees
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Posts: 155
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We have a customer that wants a NOW account for his business - LLC - He says his accountant says his company is eligible for a NOW account. Could you give me the Reg on this?
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#710066 - 04/02/07 07:57 PM
Re: NOw eligibility quest.
Tessie
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Unless he is a non-profit entity he is not eligible for a NOW account. He can, however, have a money market account.
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#710069 - 04/02/07 07:58 PM
Re: NOw eligibility quest.
Tessie
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Cheeseheadland
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If he is using his SS# and has no employees, then yes is most likely eligble.
You would want to review the FRB interpretations of Reg D for further guidence.
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#710088 - 04/02/07 08:11 PM
Re: NOw eligibility quest.
Deena
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bbsgrant - I think the FDIC and others have stated that any LLC cannot have a NOW account.
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#710093 - 04/02/07 08:16 PM
Re: NOw eligibility quest.
Skittles
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I think I beg to differ....I will have to look up and find my source on this, but my understandng was that as long as the single member LLC used their social and had no employees, it was no different than a DBA. But once one of those conditions changed, they would no longer be eligible for the NOW.
I will look for and try to find a source reference on this.
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#710129 - 04/02/07 08:41 PM
Re: NOw eligibility quest.
#Just Jay
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The Swamp
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LLC can't have a NOW account. Only sole props (which may use a ficticious or D/B/A name) and individuals (other than the non-profit, etc, etc....An LLC is an entity, not a natural person. Sole props and individuals co-mingle their funds and can do so legally. That's one way to distinguish the two. Generally, mom& pop so-called sole props will depend on whether your state recognizes these companies as sole-props or partnerships. Georgia has recognized these mom & pops as sole props and therefore allowed NOW accounts on these. Of course, that could always change tomorrow!
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#710133 - 04/02/07 08:42 PM
Re: NOw eligibility quest.
RR Joker
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Cheeseheadland
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I'll concede to joker and skittles for now then....but I am still hunting on this one!!
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#711286 - 04/04/07 05:08 PM
Re: NOw eligibility quest.
David Dickinson
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NOW...and again!. So, I found out that we opened an account: XYZ Corporation, dba John's service station. We gave him a NOW account....good or bad?
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#711316 - 04/04/07 05:27 PM
Re: NOw eligibility quest.
Trees
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TN
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Unless it's a nonprofit - bad. Corporations cannot have NOW accounts and your example is a corporation.
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#711461 - 04/04/07 07:18 PM
Re: NOw eligibility quest.
Skittles
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Thanks, Skittles. Am I the only one that seems to be experiencing a trend in legal creativity: having a bus. type entity, such as a corp. suddenly changing their status to also be a DBA. Next we will see Microsoft, dba Software programs are us...Anyone else seeing this????
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#711489 - 04/04/07 07:39 PM
Re: NOw eligibility quest.
Trees
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Posts: 14,390
Cheeseheadland
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Very common with fast food chains...
Mega Foods INC dba Wendy's 1234 Mega Foods INC dba Wendy's 1265 and so on..
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