Proprietorship Title Account in Business Name?

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Question:

Can a Proprietorship title their bank account in their business name using their EIN and not list the owner's name? The Assumed Name Cert. states the Business with be conducted as ABC Group.

Answer:

FDIC regulations and other requirements dictate that the account records reflect the true ownership of the account. ABC Group in your example is not a legal entity -- it owns nothing, including the account. The owner is the sole proprietor, whose name must be in the account title. A reading of IRS Form W-9 reveals that the IRS prefers that a sole proprietor use his/her SSN on bank accounts of the business, rather than the EIN. The EIN is used only in connection with payroll and payroll taxes.

First published on BankersOnline.com 8/13/12