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Returning Check Not Endorsed Over to Corporation

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An individual deposits a check made out to himself into a checking account owned by his closely held corporation. The check was not endorsed over to the corporation. If the check is returned, can we legally charge it back to the corporation?

Yes. Section 4-214 of the Uniform Commercial Code gives you chargeback rights if you've given your customer credit for the item, and those rights aren't affected by the fact that the customer had not endorsed the item.

First published on 7/15/13

First published on 07/15/2013

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