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Verifying Authority to Transact Business

Question: 
How do you verify which individuals have authority to transact for different types of businesses? We currently obtain a TIN and the trade name registration, as well as a certificate of LLC or incorporation if applicable, but none of these documents seem to clearly state who has authority to conduct transactions on behalf of the entity. We have in-house authority resolutions that the customer completes, but how do we authenticate that the person opening the account is entitled to do so?
Answer: 

You are required to verify the existence of the business, and verifying the identity of the signatories is clearly a "best practice."

However, it is the resolutions that establish who is authorized to sign on the account. Review the wording on your standard form. It should say that the form is only a memorial (written evidence) of a resolution passed at a properly called meeting of the entity's governing body. It may require the attestation of the corporate secretary, managing member, managing partner, etc., to say that the resolution is a true, correct, complete reflection of an official action taken by that governing body.

First published on BankersOnline.com 4/19/04

First published on 04/19/2004

Filed under: 
Operations
Filed under operations as: 
IT
TIN

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