A few of us are having a debate about the legitimacy of having more than one account titled "doing business as" - for example "Joe Smith DBA gadgets sales" may also have the same account with "Joe Smith DBA Smith garage" - how do any of you handle these? are they offered? or are separate accounts required? The issue has come up in regards to completing a CTR; a client has "multiple DBAs" but only one account. Thanks for any feedback.

I'm no expert, but if I understand your question, you have the same person DBA several different names, right? If that's the case, I don't really see a problem, as long as there were separate accounts for each one. As a sole proprietor, he can use his SSN, and as long as he had the proper Assumed Name documentation, I don't know that it would be an issue. If he's trying to have all the different businesses depositing to the same account, I would have a problem with that. How would checks be payable - to any of the entities? Would he order different checks with the same account number but different names? I'd say no to that and say he would have to have a separate account for each one.

We had a similar question a couple of months ago. I have morphed into a believer on this one.

While it might be legal for a single sole proprietor (SP) to use a single account for multiple businesses (each with its own ficticious name registration, license, or whatever is needed in your bailiwick), there are two problems with allowing such a practice.

First, it will confuse the heck out of your tellers. You spend hours drumming into their heads that checks must be deposited into a similarly-named account, and then you lay an exception on them. In my experience, this is frustrating and can result in problems.

Secondly, why should your bank participate in a customer's attempt to avoid activity and maintenance costs by consolidating into a single account?

I don't think combining multiple SP accounts into one is a good idea.

Just a correction - a d/b/a is not an entity. In the example, the individual is the only owner of the accounts. Sole proprietors are simply individuals, sometimes using a registered name other than their own to transact business. He is the only one with the ability to open accounts or even own money because he is the only one who exists.

Legitimate, yes. A good idea, probably not. This is a policy decision for your bank. Good luck.

Right. I was taking "John Smith" in the example for an individual. In any case, d/b/a indicates an alternate name, not a new entity. Even if you have ABC Corp. d/b/a DEF Corp., DEF Corp is just a name, and not an entity, and cannot enter into agreements, own property etc...

I mean Joe Smith

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DEF Corp is just a name, and not an entity, and cannot enter into agreements, own property etc...

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If they name themselves DEF Corp they better be a corporation and therefore an entity.

As Z pointed out, it's important to know the difference between a legal designation (ie CORP, LLC, etc.) and a DBA. BCD Corp could DBA as Bobs Carpet, but if Bob's Carpet had a Corp behind it, it would be a seperate legal entity from that of BCD Corp.

BCD Corp would probably run Bobs Carpet checks through the BCD Corp account with their DBA. Sometimes several DBA's can be attached as a corporation purchases other entities and moves the assets to the Corp, but retains the DBA name to take advantage of the market knowing that name.

The same could be said for an individual. I could run Truffles Cheesecakes through my business account and also deposit my Cheesecakes R Us (the crappy cakes) checks into that account, thereby allowing my trade name to be associated with two different types of products. It's not cheap, it's a business decision. I may not need two accounts if the merchandise is all coming from the same area, but I want the higher quality item to have the better trade name (DBA) associated with it.

The major risk for banks is the charge of facilitating the misappropriation of funds. This arises where the funds to John Doe DBA Al's Car Wash which has its own liability structure, say with deposit accounts assigned to a creditor, deposits the receipts to John Doe solely or John Doe DBA Sam's Pool Parlor. By allowing the deposits of checks payable to Car Wash to be placed with Pool Parlor, the bank facilitates the misappropriation of funds.
There may be many arguments why the bank won't get stuck, but why go there?