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How to Title Acct; Stock Purchase Agreement

Question: 
New Account request - Escrow agreement presented with a Buyer as Limited company organized from the UK and Shareholders (three individuals)that are selling their company to them, have entered into a Stock Purchase agreement and named Escrow agent as our bank. How do we title this account. What TIN do we use? We have to give all three individuals 1099 39; for interest earned during the holding of the account. We have instructions on how and when to disburse the funds. But how should it be titled?
Answer: 

Ken Golliher: There are no "standards" for titling this type of account; the title would simply reflect the bank's role and the expectations of the parties based on the written agreement between them. The fact that you pose the question suggests that this is unfamiliar territory for you so I will point out that your bank must have trust powers to serve in this position unless your state laws indicate otherwise.

Answer: 

Randy Carey: I would also be very leery of any transaction that named the bank as an escrow agent when the bank itself was not aware of the transaction long prior to the bank becoming involved. Regardless of whether you have trust powers or not, these types of transactions do not normally just appear on your doorstep.

First published on 11/25/2013

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