Account Owners & Authorized Signers on Corporate Bank Accounts

Corporate bank accounts need owners and authorized signers to conduct banking business. When you open a corporate bank account, you must provide all pertinent business information, including state-approved bylaws, an IRS-issued tax identification number for the business, and the name of any account owners and authorized signers. Owners and authorized signers must provide identification, and must also sign a signature card that matches signatures when making bank withdrawals or during checking account transactions.

Business Bank Account Ownership

A corporate bank account is a business bank account. Technically, the owner of the corporate bank account is the corporation, since it is its own legal entity. Conversely, a sole proprietor, although not a corporation, is a business account in which the owner is the sole proprietor.

Small corporations might only have one or two shareholder owners. While these shareholders own the company based on stock ownership, technically they become authorized signers on the account. Larger corporations might have a few authorized signers. These signers are rarely the key executives, but are instead the primary financial individuals who need to access bank funds for daily business operations.

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Who Can Be A Signer

The primary owners of the company certainly want to retain the ability to control the bank assets of the corporation. That being said, the authorized signer doesn't need to be affiliated with the company at all. A small corporation might authorize an accountant to handle all banking and might give the accountant the requisite authorization on the account.

Nonprofits often change the board of directors, who then must change the authorized signers on the account to facilitate charity operations. To authorize or change the authorized signer, the board needs to provide the company minutes to the bank by an existing signer. To be added as a new signer, the new signer must then present identification and sign a signature card.

Abilities of Authorized Signers

Authorized signers have the ability to withdraw money, write checks or commit account funds to vendors. The authorized signer can change the address of record on the account, as well. Essentially, the authorized signer has the ability to deposit and withdraw funds, as can any owner of any other account. This is why company owners need to explicitly trust authorized signers because the ability to take – or steal – the company's money is voluntarily given to them. The bank isn't requiring minutes or secondary authorization for every transaction. An exception exists for some accounts that require checks to have two authorized signatures.

Warning

The company stockholders in small companies should pay attention to the activities of authorized signers who are not considered company owners. Look for small cash withdrawals or odd transactions as potential flags of money laundering.