I know this has been discussed many times before but I can't quite get it...

(1) Any individual may maintain a NOW account regardless of the purposes that the funds will serve.

Doesn't this mean that as long as two people (2 brothers) for example haven't formed an entity that is separate from them as individuals (formal partnership, corp etc.) they would be able to hold a joint NOW account for business purpose in their individual names?

I've always preached that if the signature card shows the 2 brothers as "owners" on the business account... it is an "informal" partnership. They simply have not taken the time to file formal papers.

If one brother owns the business he can add his brother as an "authorized signer" only and earn interest... but not as an owner.

Two people together in business? Without a formal arrangement, such as an LLC/LLP/Corporation, etc. With or without paperwork, that's a partnership. No NOW.

Key questions:

Purpose? Business
Nonprofit? Gee, we hope not!
Sole proprietorship? Owned by Party A and party B, so apparently not.
Are parties A & B married to one another? No*

Result: partnership or some other form of business arrangement: No NOW

* - in some states a married couple can have a sole proprietorship.

Listen to your Mom, Joey, She's got it right!

Thank you!

From a very practical perspective, if the account is styled in the names of the spouses, most examiners don't give it a second thought.

Of course -- and this is un-PC of me -- if the last names are different, the examiner may at least question it until someone tells the examiner that the two parties are married -- to one another.