What you should know about federal bank account requirements on “new accounts” for legal entities

Forming a new business can be an exciting, yet all-consuming, endeavor. Once the paperwork is filed and a legal entity is formed, most new companies will want to start their operations as soon as possible. That likely includes opening up one or more accounts with a financial institution, such as a bank.

But legal entities may be formed to conduct and disguise criminal activity. The illicit uses range from terrorist financing and tax evasion to money laundering and corruption. In an effort to prevent illegal practices, federal regulations require banks to collect an increasing amount of information. And the information is usually collected when a new legal entity tries to open its first bank account.

So what information—and from whom—is required to open a new bank account for your entity?

Beneficial owners of a new entity are required to provide their name, address, birthdate, and social security number (or passport number in the case of foreign persons). Some financial institutions may also require a copy of a driver’s license or some other identifying document.

Beneficial owners are defined as follows: i) each individual who owns 25 percent or more of the equity interest of the legal entity customer; and ii) an individual with significant responsibility for managing the legal entity customer (think CEO, CFO, COO, Managing Member, President, Vice-President, or Treasurer). The number of individuals considered a beneficial member will vary for each legal entity. And a person may qualify under both types of beneficial member.

Entities are required to keep the financial institution apprised of any change in the beneficial owners. Information for new beneficial owners should be provided to the financial institution in a timely manner.

Starting a new business is an exciting venture. But the required paperwork, disclosures, and registration can become confusing, especially when you just want to get to work. The attorneys at Jones Obenchain LLP can guide you through the process of forming your business and ensure you’re off to a great start.

JO In Action – Food Drive

Sadly, 795 million people—or one in nine people in the world—do not have enough to eat. With this sad statistic in mind, Jones Obenchain has accepted a challenge from Primerus, a highly selective society of the world’s finest boutique law firms. Primerus asked its members to combat local and global hunger as part of its “Primerus Fights World Hunger” global community-service initiative.

In response to this call to action, Jones Obenchain is conducting a food drive for the month of September. Attorneys and staff will collect and donate nonperishable food items and deliver them to the Northern Indiana Food Bank at month’s end. Feel free to drop by the office with your contribution!

 

Patriot Day – A Day of Remembrance

Patriot Day is the day the United States pauses to remember the terrorist attacks of September 11, 2001.  This day is commonly referred to as 9/11.  It is believed that 2,977 people died in these attacks. President George W. Bush proclaimed September 11th Patriot Day in 2002.

Happy Labor Day!

Wishing you a happy and safe labor day weekend from the attorneys and staff at Jones Obenchain, LLP.

We traditionally think of Labor Day as a celebration of the end of summer, but there is more to the story. Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country. To learn more about the history of Labor Day go to: https://www.dol.gov/general/laborday/history

 

 

JO Knows Dissolution of Marriage

It’s hard to imagine anything having a more profound impact on your family life, your financial life, and your personal life than a divorce. But good planning beforehand, via an antenuptial agreement, and good representation during, via Jones Obenchain, can make the unbearable bearable. We’ve been helping people through their divorces for decades. And if necessary, we’d be happy to help you through yours.

JO attorneys included in the Best Lawyers in America for 2019

Jones Obenchain, LLP is pleased to announce that R. Kent Rowe, III, and J. Thomas Vetne have been selected by their peers for inclusion in the 25th Edition of The Best Lawyers in America in the fields of Medical Malpractice Law (Kent) and Insurance Law (Tom). Congratulations to Kent and Tom!

More about Best Lawyers®:

Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Because Best Lawyers is based on an exhaustive peer-review survey in which almost 50,000 leading attorneys cast nearly five million votes on the legal abilities of other lawyers in their practice areas, and because lawyers are not required or allowed to pay a fee to be listed, inclusion in Best Lawyers is considered a singular honor.

Would You Like to Become a Community Tax Volunteer?

If you enjoy preparing your taxes and have a desire to help others becoming a Community Tax Volunteer may be for you. Each year IRS volunteers assist people with low-to-moderate incomes, senior citizens, persons with disabilities, and those who speak limited English prepare their taxes. The Volunteer Income Tax Assistance and the Tax Counseling for the Elderly programs, which are sponsored by the IRS, prepare more than 3.5 million federal tax returns, for those who qualify, at no cost. If you are interested in learning more about this opportunity to assist visit: www.irs.gov/newsroom/heres-how-to-become-a-community-tax-volunteer

JO Knows Probate

Probate is the process by which a court oversees the lawful transfer of title to property under a will. It must take place in the state and county where the decedent resided when they died. Probate does not involve non-probate assets, such as life-insurance or retirement-account proceeds passing to designated beneficiaries; property owned by trusts on the date of death; or jointly owned property when the first joint owner dies. So married couples that have joint title to most of their property rarely need probate after the first spouse dies.

The word “probate” often engenders fear. But probate is not a scary process. The court is there to oversee the job your personal representative does and to make sure the instructions in your will are followed. Your lawful debts will (and must) be paid. Your heirs take comfort in knowing that the court will hear them if they have questions or objections. Probate is not unduly lengthy; usually six months or so is enough to wrap things up. And it is not a great expense. In fact, many people will spend more money trying to “avoid probate” than probate costs.

While placing an asset (like an investment account or a vacation home) in a trust will avoid probating that asset, it is almost impossible—and probably foolish—to try to make everything you own a non-probate asset. Under Indiana law this is unnecessary, because no probate estate need be opened if the value of the probate assets is less than $50,000. So you don’t need to put your refrigerator, lawn mower, golf clubs, or clothing into a trust.

Rather than probate avoidance, a better goal is probate management. Monitor the way your assets are owned. Create joint ownerships, designate beneficiaries, and use a trust in sensible ways. But don’t go overboard. For example, while making cash gifts to children and grandchildren can have many benefits, be sure that you keep enough resources available to provide for your own care and comfort.

Questions About Tax Cuts and Jobs Act?

If you have questions about the Tax Cuts and Jobs Act legislation passed last year IRS.gov is a great resource to get some answers.  The information available will help not only individual taxpayers, but also businesses and the tax community to understand the law and how it will affect their taxes. To see what resources are available visit: https://www.irs.gov/newsroom/resources-on-irsgov-help-all-taxpayers-understand-tax-reform

Celebrate National Book Lovers Day

National Book Lovers Day is celebrated on August 9th and/or the first Saturday in November. It is a day which is meant to encourage you to find a place in the shade and relax with a good book.  Reading is a great hobby. Reading is educational, informative, and relaxing. It makes us both smarter, and happier people. So, grab an interesting book or your Kindle, and find a quiet, cozy place to read. Celebrating Book Lovers Day in August is pleasurable on the deck, under a shady tree, poolside, or in a cozy hammock. If you fall asleep while reading, that’s okay. It’s all part of the relaxing benefits of being a book lover.