Skip to content
BOL Conferences
Page 1 of 2 1 2
Thread Options
#699848 - 03/12/07 04:28 PM NOw eligibility quest.
Trees Offline
Power Poster
Joined: Apr 2005
Posts: 4,013
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?

Return to Top
Deposits and Payments
#699850 - 03/12/07 04:28 PM Re: NOw eligibility quest. Trees
Skittles Online
10K Club
Skittles
Joined: Sep 2002
Posts: 13,965
TN
Two or more individuals cannot be a 'sole' proprietorship. They may have an informal partnership, which is ineligible for a NOW account.
_________________________
My Opinions Only

Return to Top
#700039 - 03/12/07 07:35 PM Re: NOw eligibility quest. Skittles
Andy_Z Offline
10K Club
Andy_Z
Joined: Oct 2000
Posts: 27,748
On the Net
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.
_________________________
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

Return to Top
#700090 - 03/12/07 08:08 PM Re: NOw eligibility quest. Andy_Z
Trees Offline
Power Poster
Joined: Apr 2005
Posts: 4,013
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

Return to Top
#700110 - 03/12/07 08:28 PM Re: NOw eligibility quest. Trees
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Trees: A "dba" is not a legal entity. dba means "Doing Business As". Anyone or Anything can have a dba - a sole proprietor, a corporation, a LLC, LLP, etc.

Therefore, don't mix NOW account eligibility and dba's in the same sentence. Ask "what entity has this name?"
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#700111 - 03/12/07 08:30 PM Re: NOw eligibility quest. Trees
BrendaC Offline
Power Poster
BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
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.
_________________________
Life without Jesus is like an unsharpened pencil - it has no point.

Return to Top
#700453 - 03/13/07 04:01 PM Re: NOw eligibility quest. David Dickinson
Trees Offline
Power Poster
Joined: Apr 2005
Posts: 4,013
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???

Return to Top
#700615 - 03/13/07 06:22 PM Re: NOw eligibility quest. Trees
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
"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.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#700840 - 03/13/07 11:07 PM Re: NOw eligibility quest. rlcarey
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Trees: Randy is absolutely right - my point exactly. Let me give you another example:
The Legal name of my company is "Financial Compliance Consulting" yet our "trade" name or dba is Banker's Compliance Consulting. This is a "S" corporation. IOW, FCC dba BCC can't have a NOW account for our general operating funds.

Hope this helps.
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#706829 - 03/26/07 08:52 PM Re: NOw eligibility quest. David Dickinson
Trees Offline
Power Poster
Joined: Apr 2005
Posts: 4,013
Thank you guys. It is much more clear to me...out of the gray and into the blue.

Return to Top
#710062 - 04/02/07 07:45 PM Re: NOw eligibility quest. Trees
Tessie Offline
100 Club
Joined: Jan 2006
Posts: 155
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?

Return to Top
#710066 - 04/02/07 07:57 PM Re: NOw eligibility quest. Tessie
Skittles Online
10K Club
Skittles
Joined: Sep 2002
Posts: 13,965
TN
Unless he is a non-profit entity he is not eligible for a NOW account. He can, however, have a money market account.
_________________________
My Opinions Only

Return to Top
#710069 - 04/02/07 07:58 PM Re: NOw eligibility quest. Tessie
#Just Jay Offline
10K Club
#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
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.
_________________________
I don't repeat gossip, so listen closely...

Return to Top
#710072 - 04/02/07 08:01 PM Re: NOw eligibility quest. Tessie
Deena Offline
Power Poster
Deena
Joined: Nov 2000
Posts: 2,701
PA
Tasha, here's the reg.
_________________________
Opinions expressed are mine and not necessarily those of my employer.

Return to Top
#710088 - 04/02/07 08:11 PM Re: NOw eligibility quest. Deena
Skittles Online
10K Club
Skittles
Joined: Sep 2002
Posts: 13,965
TN
bbsgrant - I think the FDIC and others have stated that any LLC cannot have a NOW account.
_________________________
My Opinions Only

Return to Top
#710093 - 04/02/07 08:16 PM Re: NOw eligibility quest. Skittles
#Just Jay Offline
10K Club
#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
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.
_________________________
I don't repeat gossip, so listen closely...

Return to Top
#710123 - 04/02/07 08:37 PM Re: NOw eligibility quest. #Just Jay
Skittles Online
10K Club
Skittles
Joined: Sep 2002
Posts: 13,965
TN
I found this thread by John Burnett and I have also read something similar from the regulators late last year, however I cannot put my hands on it at the moment. [url=Thread]http://www.bankersonline.com/forum/ubbth...true#Post574060[/url]
_________________________
My Opinions Only

Return to Top
#710129 - 04/02/07 08:41 PM Re: NOw eligibility quest. #Just Jay
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
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!
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

Return to Top
#710133 - 04/02/07 08:42 PM Re: NOw eligibility quest. RR Joker
#Just Jay Offline
10K Club
#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
I'll concede to joker and skittles for now then....but I am still hunting on this one!!
_________________________
I don't repeat gossip, so listen closely...

Return to Top
#710221 - 04/02/07 10:29 PM Re: NOw eligibility quest. #Just Jay
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
FWIW, Skittles and Joker are right. The regulators issued a guidance that says NO LLC can have a NOW.
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top
#710357 - 04/03/07 02:23 PM Re: NOw eligibility quest. David Dickinson
MN Banker Offline
Platinum Poster
Joined: Aug 2006
Posts: 980
Here is the guidance

Return to Top
#711286 - 04/04/07 05:08 PM Re: NOw eligibility quest. David Dickinson
Trees Offline
Power Poster
Joined: Apr 2005
Posts: 4,013
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?

Return to Top
#711316 - 04/04/07 05:27 PM Re: NOw eligibility quest. Trees
Skittles Online
10K Club
Skittles
Joined: Sep 2002
Posts: 13,965
TN
Unless it's a nonprofit - bad. Corporations cannot have NOW accounts and your example is a corporation.
_________________________
My Opinions Only

Return to Top
#711461 - 04/04/07 07:18 PM Re: NOw eligibility quest. Skittles
Trees Offline
Power Poster
Joined: Apr 2005
Posts: 4,013
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????

Return to Top
#711489 - 04/04/07 07:39 PM Re: NOw eligibility quest. Trees
#Just Jay Offline
10K Club
#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
Very common with fast food chains...

Mega Foods INC dba Wendy's 1234
Mega Foods INC dba Wendy's 1265
and so on..
_________________________
I don't repeat gossip, so listen closely...

Return to Top
Page 1 of 2 1 2

Moderator:  John Burnett