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Nominee Entity: Single Member LLC or Partnership

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Question: 
Would a single member LLC owned by a trust company or the bank, be a more suitable entity to act as a nominee for a trust department than a partnership? The FDIC Examination Manual suggests that partnerships have historically been used but having individual officers be "partners" of the nominee entity doesn't seem to fit since they aren't really owners of the nominee entity but rather seems to be more like nominees for the bank or trust company.
Answer: 

The first thing you need to determine is whether your State statutes allow securities to be registered in nominee form. Then, you really need to sit down with legal counsel on a question like this and determine the best structure of the partnership under State law and make sure your Board approves and reviews it on a periodic basis.

First published on 06/17/2018

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