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How to Negotiate Check When Business is Dissolved?

If a business closes its bank account with the bank paying the balance to it in the form of a cashier's check, payable to the business, if the business is dissolved, how can the check then be negotiated?

by Randy Carey:

The remaining funds in the account should have been disbursed according to the dissolution provisions in the entity's organizational documents. Cutting them a check made payable to the business is not the answer. There is no way for it to be negotiated.


by Ken Golliher:

Ditto. The account should have been closed by payment of checks issued by the business, probably to its owners.

The banking practice of closing an account with a check payable exactly the way the account is titled is sound, but it simply doesn't apply if the owner no longer exists.

First published on 10/15/2017

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