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Electronic Debits from LLC to Personal Accounts

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Question: 
We have a business account that's an LLC. The partners on this account would like to electronically debit this account to credit their personal accounts (also held at the bank)? Would you agree that this transaction should be electronic and if so, what documentation should we require? If the answer is to the contrary, then should we require that the customer write a check out of the business account and deposit to the personal accounts?
Answer: 

This could be a rough equivalent of Direct Deposit. Instead of using the ACH, your bank's internal EFT system is used. If you are able to control this in such a way as to prevent transfers from owner accounts to LLC's accounts, you might be OK here. These transfers will be subject to Regulation E if they are going to consumer accounts.

First published on BankersOnline.com 07/18/05

First published on 07/18/2005

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