Husband & Wife Partnership NOW Account?

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Question:

We have a husband and wife partnership account which doesn’t have a written formal agreement. It has an EIN; does this qualify as a NOW Account? I say no but they want proof.

Answer:

A partnership cannot be a sole proprietorship, the terms are mutually exclusive. It is not an individual; therefore, unless the business is an approved non-profit, it cannot have a NOW account. You can print out and share a copy of section 204.130 of Regulation D with the partners.

The fact that the business uses an EIN is a red herring. Even a sole proprietor can have an EIN if he or she has employees.

First published on BankersOnline.com 4/12/10