Partnership with no agreement

Posted By: GottaLuvIt

Partnership with no agreement - 06/17/11 09:43 PM

Hello fellow Tennesseans!
Wondering what documentation your insitution requires when you open an account for a partnership that has no partnership agreement???

What are you relying on that shows it is indeed a partnership and, more specifically, who are the beneficial owners of the partnership?

I'd certainly appreciate your feedback!!!
Posted By: Dani York, CRCM

Re: Partnership with no agreement - 06/17/11 09:56 PM

Typically we require a partnership agreement. For those foolish enough to operate without one, we usually ask for a business license, a TIN/EIN letter form the IRS, and copies of tax return schedules ahowing the partnership name and the partners involved in the business. I want to say that info is on a K-1, but don't quote me (it's been a long time since I've reviewed tax returns). I think there is also a schedule in the business tax return that lists the partners' names.

If they don't have that, their only other option is to open as a sole proprietorship and list the extra people as signers.
Posted By: Night Train

Re: Partnership with no agreement - 07/06/11 01:42 PM

We sometimes have partners [no written agreement] who split the money 50/50 [or however they agreed] and file on their schedule C's.

We have them create a written partnership agreement for banking purposes. It will list the partnership name, address, partners names, who is authorized to open the account, sign on the account, close the account, if they can independently, etc. They both sign the agreement and them provide any other documentation such as business license and EIN.