Bank Legal Structure

Iden­ti­fy yourself by name and address the mem­bers of the ori­gi­nal board of direc­tors. Keep in mind that sta­te and federal ban­king regu­la­ti­ons impo­se requi­re­ments and restric­tions on a bank‘s board mem­bers, man­da­tes that are sepa­ra­te and dis­tinct from the foun­ding arti­cles of asso­cia­ti­on. Obtain a form of sta­tus from the Secreta­ry of Sta­te in the juris­dic­tion in which the bank will ope­ra­te. Enter the sug­gested name of the bank at the top of the form. Make sure in advan­ce that the name is avail­ab­le and not alrea­dy in use. Check avai­la­bi­li­ty by using the search tool on the agency‘s web­site or by cal­ling the company‘s depart­ment and asking an employee to con­firm avai­la­bi­li­ty. Spe­ci­fy the spe­ci­fic pur­po­se for which the com­pa­ny is orga­ni­zed. Unli­ke many other com­pa­nies that allow a broad let­ter of intent, a ban­king com­pa­ny must have a spe­ci­fi­cal­ly defi­ned pur­po­se. The object state­ment reads: “The Com­pa­ny shall be for­med to con­duct tran­sac­tions aut­ho­ri­zed by banks under federal law and the laws of that sta­te.” Bank of Ame­ri­ca, N.A., Mer­rill, its affi­lia­tes and con­sul­tants do not pro­vi­de legal, tax or accoun­ting advice. Con­sult your own legal and/or tax advi­sors befo­re making finan­cial decisions.

All back­groun­ders pro­vi­ded are pro­vi­ded for dis­cus­sion or review pur­po­ses only. Small Busi­ness Resour­ces con­tent (inclu­ding, but not limi­ted to, third par­ty con­tent and Bank of Ame­ri­ca) is pro­vi­ded “as is” and con­tains no express or implied war­ran­ties, pro­mi­ses or war­ran­ties of suc­cess. Bank of Ame­ri­ca makes no war­ran­ties as to the accu­ra­cy, relia­bi­li­ty, com­ple­teness, use­ful­ness, non-infrin­ge­ment of intel­lec­tu­al pro­per­ty rights or qua­li­ty of any con­tent, regard­less of the pro­du­cer of such con­tent, and oppo­ses it to the ful­lest extent per­mit­ted by law. Among the many chal­len­ges facing the new Euro­sys­tem – the Euro­pean Cen­tral Bank and the cen­tral banks of the ele­ven mem­bers of the Euro­pean Mone­ta­ry Uni­on – is the pos­si­bi­li­ty that par­ti­ci­pa­ting coun­tries will react dif­fer­ent­ly to chan­ges in inte­rest rates. This paper pro­vi­des evi­dence that dif­fe­ren­ces in finan­cial struc­tu­re are the direct cau­se of the­se natio­nal asym­me­tries in the trans­mis­si­on of mone­ta­ry poli­cy and that the­se dif­fe­ren­ces in the finan­cial struc­tu­re are due to dif­fe­ren­ces in the legal struc­tu­re. The aut­hor con­clu­des that the finan­cial struc­tures and mone­ta­ry trans­mis­si­on mecha­nisms of the coun­tries of the Euro­pean Uni­on will remain diver­se if the legal struc­tures are not har­mo­ni­zed throughout Euro­pe. Name the agent for pro­cess deli­very. The repre­sen­ta­ti­ve for the ser­vice of the pro­ce­du­re is the natu­ral or legal per­son desi­gna­ted by the Com­pa­ny to accept the ser­vice of a sub­poe­na and a request in case of pro­se­cu­ti­on of the Bank. The agent for the deli­very of the pro­cess must main­tain a phy­si­cal address in the sta­te of incor­po­ra­ti­on. Com­pa­nies have a pre­dic­ta­ble manage­ment struc­tu­re and com­pa­ny shares are gene­ral­ly easier to trans­fer than owners­hip shares in LLCs. For this rea­son, exter­nal inves­tors tend to pre­fer to invest in com­pa­nies. You form a cor­po­ra­ti­on by sub­mit­ting docu­ments to your state.

Once crea­ted, a com­pa­ny is its own legal enti­ty, sepa­ra­te from its owners. If the com­pa­ny is unab­le to pay its debts, credi­tors can search for bank accounts and com­pa­ny assets. But they can­not sue the owners‘ per­so­nal pro­per­ty (as long as the owners are not accu­sed of mis­con­duct). Your choice of busi­ness struc­tu­re can affect ever­ything from the amount you pay in taxes to your abi­li­ty to rai­se funds to your per­so­nal expo­sure if the com­pa­ny goes bankrupt. Befo­re making a final decisi­on, dis­cuss your opti­ons with an expe­ri­en­ced accoun­tant and busi­ness lawy­er. In addi­ti­on to recom­men­ding the best legal struc­tu­re, a lawy­er can help you start a busi­ness and the docu­ments and con­tracts you need to get star­ted on the right foot. Choo­sing the right legal struc­tu­re for your busi­ness can pro­tect your per­so­nal pro­per­ty if your busi­ness is sued. It can also save you money on your taxes and help you attract inves­tors. Set­ting up a bank is a com­pli­ca­ted regu­la­to­ry and legal issue. One ele­ment asso­cia­ted with the crea­ti­on of a bank is the crea­ti­on of the legal enti­ty its­elf. As a rule, a bank is a busi­ness. The pro­cess of set­ting up a bank is not much dif­fe­rent from that asso­cia­ted with forming ano­t­her type of for-pro­fit corporation.

Des­pi­te some minor dif­fe­ren­ces, the pro­cess of set­ting up a bank is lar­ge­ly the same in every sta­te in the coun­try, accord­ing to “Cor­po­ra­ti­ons: Examp­les & Explana­ti­ons” by Alan R. Pal­mi­ter. Sub­mit the form online or to the Office of the Secreta­ry of Sta­te. Pay the regis­tra­ti­on fee at the same time. Filing the law and paying fees com­ple­tes the pro­cess of set­ting up a bank. Enter the bank‘s pri­ma­ry address in the field pro­vi­ded. As a rule, a new­ly foun­ded bank does not have bran­ches. In some sta­tes, a busi­ness foun­ded by licen­sed pro­fes­sio­nals may be cal­led a “pro­fes­sio­nal cor­po­ra­ti­on” or “pro­fes­sio­nal ser­vices cor­po­ra­ti­on” to dis­tin­guish it from other types of busi­nes­ses. Com­pa­ny owners are cal­led share­hol­ders and enjoy several important advan­ta­ges: Limi­ted part­ners­hips and limi­ted part­ners­hips Like a cor­po­ra­ti­on, limi­ted lia­bi­li­ty com­pa­ny or LLC, limits the lia­bi­li­ty of its owners for com­mer­cial debts. You form an LLC by filing docu­ments with your state.

LLCs are a popu­lar choice for small busi­nes­ses becau­se they bene­fit from the pro­tec­tion of a company‘s lia­bi­li­ty, but with more fle­xi­ble manage­ment, tax and owners­hip opti­ons, and fewer record kee­ping and repor­ting requi­re­ments. If you own a sole pro­prie­tor­s­hip or part­ners­hip, you are ful­ly respon­si­ble for all debts of the busi­ness, even if that debt is due to some­thing your busi­ness part­ner did. This means that a busi­ness belie­ver might be loo­king for your per­so­nal money, home, and other assets, as well as the money you have in the busi­ness. This lia­bi­li­ty risk is one of the rea­sons why you might con­si­der forming a com­pa­ny or limi­ted lia­bi­li­ty com­pa­ny, espe­cial­ly if you have busi­ness part­ners. A limi­ted part­ners­hip dif­fers from a part­ners­hip in that it has gene­ral part­ners and limi­ted part­ners. A per­so­nal­ly respon­si­ble part­ner is invol­ved in the manage­ment of the com­pa­ny and must be ful­ly respon­si­ble for all debts of the com­pa­ny. A limi­ted part­ner can­not be invol­ved in the manage­ment and lia­bi­li­ty is limi­ted to the amount inves­ted. Limi­ted part­ners­hips are com­mon in com­mer­cial real esta­te and other indus­tries whe­re it is desi­ra­ble to rai­se funds from pas­si­ve inves­tors. By default, a one-mem­ber LLC is taxed as a sole pro­prie­tor­s­hip and a mul­ti-mem­ber LLC is taxed as a part­ners­hip. Owners who work in the busi­ness are con­si­de­red self-employ­ed and pay inco­me and self-employ­ment taxes on their share of the company‘s profits.

But an LLC can also file a form with the IRS that choo­ses to be taxed as a C com­pa­ny or an S com­pa­ny. Owners of an LLC taxed as an S com­pa­ny can be employees of the com­pa­ny, which can save money on self-employ­ment taxes. If you are the sole owner of your busi­ness, you can ope­ra­te as a sole pro­prie­tor­s­hip. If you own the busi­ness with others, it is auto­ma­ti­cal­ly a gene­ral part­ners­hip. You do not need to sub­mit docu­ments to start a sole pro­prie­tor­s­hip or part­ners­hip. Howe­ver, if your busi­ness ope­ra­tes under a name other than your own name (such as “Joe‘s Cof­fee” or “Intrepid Designs”), you may need to file docu­ments with your sta­te or regi­on to crea­te a fic­ti­tious com­pa­ny name, tra­de name, or dba. A limi­ted lia­bi­li­ty com­pa­ny offers limi­ted lia­bi­li­ty to some or all of the part­ners, but the details vary from sta­te to sta­te. Some sta­tes limit limi­ted part­ners­hips to cer­tain pro­fes­si­ons. A limi­ted lia­bi­li­ty com­pa­ny might be a good choice if you want limi­ted lia­bi­li­ty but can‘t form an LLC. Let‘s look at some of the pos­si­ble opti­ons for struc­tu­ring your new busi­ness. The IRS tre­ats sole pro­prie­tor­s­hips and part­ners­hips as “igno­red cor­po­ra­ti­ons.” This means that the com­pa­ny its­elf does not pay inco­me tax.

Ins­tead, owners report their share of busi­ness inco­me and expen­ses on their per­so­nal inco­me tax returns, and they pay per­so­nal inco­me tax on all pro­fits. Some links may take you from Bank of Ame­ri­ca to unaf­fi­lia­ted web­sites. Bank of Ame­ri­ca has not been invol­ved in the crea­ti­on of con­tent pro­vi­ded on unaf­fi­lia­ted web­sites and does not war­rant or assu­me any respon­si­bi­li­ty for its con­tent. By visi­t­ing the­se web­sites, you agree to all of their terms of use, inclu­ding their pri­va­cy and secu­ri­ty poli­ci­es. Mer­rill Lynch, Pier­ce, Fen­ner & Smith Incor­po­ra­ted (also known as “MLPF&S” or “Mer­rill”) pro­vi­des cer­tain invest­ment pro­ducts spon­so­red, mana­ged, dis­tri­bu­t­ed or pro­vi­ded by affi­lia­tes of Bank of Ame­ri­ca Cor­po­ra­ti­on (“BofA Corp.”). MLPF&S is a regis­tered bro­ker-dea­ler, a regis­tered invest­ment advi­sor, a mem­ber of the SIPC level and a whol­ly-owned sub­si­dia­ry of BofA Corp. Credit cards, over­draft faci­li­ties and loans are sub­ject to credit appro­val and solvency.