How to Prove You Own Your Business

Problem: Someone (often a bank) wants proof you own your business

You can’t open a business bank account without providing proof to the bank that you own your company. Business bankers will request a document showing the person opening the account is actually the business owner. Some bankers won’t let you open a business bank account because the banker says your LLC or corporation documents do not list you as the owner in the company’s legal documents.

Solution: Inform your banker or find a new banker

In short, many business bankers don’t know what to look for in legal documents. If they don’t see someone listed as the “owner,” they claim you don’t have the right documents. However, legal documents often use other terms to indicate the owner of a business. The company’s owner is typically clear from designations on the documents such as shareholder, owner, member (in the case of an LLC), or officer roles such as president, treasurer, or secretary.

Background: Legal Documents Use Various Terms for “Owner”

Shortly after business owners form a new LLC or corporation, they seek to open a bank account for the business. Usually, this is a smooth process.

Unfortunately, some business owners have encountered problems when opening a bank account for their new business. Some bankers take a look at the business documents and think some additional document is required. As background, these are standard formation documents for small businesses:

Standard documents for a corporation (S corp or C corp)

  1. Articles of Incorporation
  2. Bylaws
  3. Written Action of Incorporator
  4. Other “written actions” or “meeting minutes”
  5. Agreements between the shareholders

Standard documents for an LLC

  1. Articles of Organization
  2. Bylaws, Member Control Agreement, Operating Agreement, or a similar document
  3. Written Action of Organizer
  4. Other “written actions” or “meeting minutes”

A new business owner explained his problem recently:

I ran into a problem when trying to open a business bank account. The banker said the “organizer” who filed the Articles of Organization must sign the bank account documents. The “organizer” was my attorney, and she won’t sign for my bank account. Can you help?

The banker failed to understand legal terms for “owner”

Business owners have complained the banks think the organizer is the owner, when in fact, that simply is not true. Organizer is simply a term for whoever is filing the documents. For example, if a business is formed by an attorney, the attorney will sign as the “organizer” of the business.

“Organizer” is the person who files the documents. The Written Action (this is the title of the document) will be signed by whoever filed the documents, which is not necessarily the owner.

The owner is indicated using terms like

  • Shareholder (in a corporation)
  • Member (in an LLC)

Officers also have authority to open bank accounts for the business. The officers are indicated using terms like

  • Officer (in a corporation) or Manager (in an LLC)
  • President (in a corporation or LLC), CEO (in a corporation or LLC), or Chief Manager (in an LLC)
  • Treasurer (in a corporation or LLC)
  • Secretary (in a corporation or LLC)

Look in the documents for these terms to show you own and control the company.

If you still cannot get resolution, ask for a bank manager, who most likely is more knowledgeable than the banker you worked with and will understand how this works.

Tip: Find a business bank where the bankers (1) are knowledgeable about business and (2) have other resources that can help you as you grow.

For transactions and deals more complex than opening a bank account, you may need to provide other proof of ownership. This might include an official tax document or secretary’s certificate (written authorization from the company, signed and often notarized by the secretary of a company).

Leave a Public Comment

  • Brock Andersen
    November 10, 2015, 11:27 pm

    Excellent article! Our clients occasionally run into this at the bank because some states do not require disclosure of ownership on the LLC articles of organization and it can be EXTREMELY frustrating for everyone involved. I recently sent a client a link to this article to help shed light on the problem because their bank claimed that only the “organizer” had the rights to open a bank account. Who trains these people?? Anyway–again, thank you for the great article.