Business Account Titling Flashcards
Sole Proprietor:
- Managed and owned by one person
- Owner is financially and legally responsible for all debts and legal actions against the business
- Fictitious name not required when last name of client is used in business name
Limited Liability Company LLC
Requesting account in business name
Limits liability and protects personal assets
LLC Corporate Advantage: limited liability for owners
LLC Partnership Advantage: tax advantage
Similar to corporation but with more flexibility and is managed by its members or by a manager
Corporation (Professional)
- Incorporated business organized by certain professional service providers requests to open an account in the business name
- Provide one type of professional service (lawyers, doctors etc)
- stock in corporation is issued to only persons licensed to practice the profession
- shareholders: own corporation and elect board of directors
- board of directors: govern the general affairs of the corporation and appoint officers
- officers: who conduct daily activities of the corporation
Non - Profit Corporation
- Can be a business and make money
- Profits must be for corporate objective not for distributions to member or shareholders and may not benefit them financially
- operated to serve public need - charitable, educational, religious, scientific, social, cultural, athletic
- require due diligence
Profit Corporation
Organized as separate entity with the objective to make money
General Partnership
Made up of two or more parties engaged together in business for profit
Partners manage business and are personally responsible for the debts of the Partnership
Limited Liability Partnership
Limited Liability but are able to participate in management of business
Limited partnership
Formed by two or more persons or businesses having one or more general partners and one or more limited partners
- general partners manage the business and personally responsible for debts of Partnership
- limited partners contribute capital, but not liable for Partnership debts and do not participate in the management of the company
Limited Liability limited Partnership:
- Consists of one or more general partners and one or more limited partners
- General partners manage LLLP
- limited partners have a financial interest
Equity Owner:
Equity owner can have any amount of equity interest in the business, but the associate only NEEDS to document those with 25%
Controlling Manager
Individual with significant responsibility to control, manage or direct the business as an executive officer or senior manager
Provider:
- Client opening the account in person and providing you with the required information.
- Usually the equity owner or controlling manager
Parent Company
- Controls a partially or wholly owned smaller company through ownership of a majority amount of the smaller company’s voting stock
- Parent company Relationship typically is formed through the acquisition of a smaller company or the creation of a subsidiary
Related Parties
Persons associated with the account as non-owners, such as a power of attorney for a sole proprietorship account, or Doing Business As (DBA) for any business account
Small business signers must be present
Combined Statement
This combines information about all of a clients accounts in one periodic statement
