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Clients Opening Business Checking Accounts

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Question: 
There are a lot of clients visit my branch to open a business checking account on behalf of the business owners. In the last case, a US resident visited my branch along with the power of attorney document authorizing him to open the bank account on behalf of his friend who is the sole member of a Wyoming LLC. He had other necessary documents like articles of organization, EIN, copy of ID etc. However, I did not open him a bank account because he was not listed as the member or manager of the company. What are your suggestions? Thanks
Answer: 

This is a matter of state law and bank policy. Most power of attorney documents allow an attorney in fact to act on the personal interests of the principal. Authority to transact on behalf of a business is granted by operating agreements and corporate resolutions. If your institution was uncertain of the authority of an individual claiming to act on behalf of an entity, then you mitigate your risk by saying, "No."

First published on 01/27/2019

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