Name on a Sole Proprietor Account

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Question:

Is there any legal reason to require an individual to use their personal name on a sole proprietor account instead of the business name? I understand the mismatch issue with the IRS and the SSN, but it will not be an interest bearing account.

Answer:

One key reason is that the FDIC requires that account records reflect the true ownership of accounts for the accurate administration of deposit insurance regulations.

Other reasons include the need to be able to determine true account ownership if the bank is served with legal process such as tax levies, garnishments, writs of execution, subpoenas, etc.

First published on BankersOnline.com 5/23/11