I have two persons that have requested a joint account for a DBA account. Although this is rare, is there anything wrong with this arrangement under Tennessee law? Also, if one of the parties wants to limit access of the other, would it be okay in Tennessee to open it as a POD so that access is limited but survivorship is intact? Your advice would be much appreciated.

Just curious, is this a partnership because they share profits in a business? If so, is the name a trade or fictitious name (DBA) or is it the partnership name?

It's a husband and wife with a small business. I guess it can be referred to as a mom & pop.

I'm a little confused, but in general two people in business together make up a partnership. Regardless of whether they are married, two people cannot be a sole proprietorship.

In Tennessee, an individual, a partnership, a corporation, and an LLC can all register to do business under an assumed name; i.e. any one of them can use a DBA name. "DBA" is not a synonym for a sole proprietorship.

Two people "dba" is a general partnership, whether that was their intention or not. The trade name is the partnership name. The name on the account should be structured accordingly, i.e., Husband and Wife Partnership, a Tennessee general partnership. They would sign in their capacity as general partners.

I ran into a similar situation a couple of years ago. A warranty deed vested title to "John and Jane Doe, dba J & J Partners". I raised the question of proper ownership. Was it John and Jane's as individuals or did it belong to the partnership? What if John and Jane got divorced or one of them died? I just imagined some lawyer wreaking havoc with this.

(Clearly I am bored if I am responding to posts that are months old ...)

MJ

We have quite a few accounts set up as sole proprietorships with joint owners, these are mom & pop's or family owned. Makes it confusing when there are reprtable CTR's. Our CIF person said that this is allowed under Tennessee state law. Any comments?

I refer you to TCA 61-1-202(a). I am not aware of an allowance under Tennessee law that lets a husband and wife (or other family member) conduct business as a "sole proprietorship".

What part of "sole" does this person not understand? Sole means one. Joint means there is more than one. A husband and wife are two people, not one.

Does your CIF person allow you to set up accounts under the trade name for a sole proprietorship?

As I stated above, any two people sharing the profits of a business are partners, regardless of their relationship to each other outside the business, whether that was their intent or not. They do not have to have a partnership agreement to be a partnership.

In some states a husband and wife doing business is not considered a partnership, in other it they may constitute a partnership. Look to your state's law, or better yet, call an attorney.

Actually, I have raised this question with bank counsel in the past because we had loan officers doing exactly what elvisfan describes. That was the cite he gave me then and the information he gave me then.

I would probably point to another section of portion of the code:

61-1-202. Formation of partnership. —

(c) In determining whether a partnership is formed, the following rules apply:

(3) A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received in payment:

(A) Of a debt by installments or otherwise;

(B) For services as an independent contractor or of wages or other compensation to an employee;

(C) Of rent;

(D) Of an annuity or other retirement or health benefit to a beneficiary, representative, or designee of a deceased or retired partner;

(E) Of interest or other charge on a loan, even if the amount of payment varies with the profits of the business, including a direct or indirect present or future ownership of the collateral, or rights to income, proceeds, or increase in value derived from the collateral; or

(F) For the sale of the goodwill of a business or other property by installments or otherwise.


Unless someone can find a statute that specifically authorizes husband and wife SPs, I would say it would be hard to say that it is not a partnership under the statutes.