LLC Owning an Interest Bearing Checking Account

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Question:

Can a limited liability company for profit have an interest bearing checking account?

Answer:

No, an LLC (even a single-member LLC) is not a sole proprietorship (even though the IRS allows a single-member LLC to use the member's SSN as its tax ID number). Also, the Fed has released a copy of a letter it sent to the Tennessee Department of Financial Institutions, in which FRB offers its legal opinion that LLCs are not eligible to hold NOW accounts. _________________________

First published on BankersOnline.com 12/11/06