Re: Business name addition to corporate checking
- From: "McGyver" <Greyprof@xxxxxxx>
- Date: Tue, 29 Aug 2006 14:56:45 GMT
<superprimenova@xxxxxxxxx> wrote in message
news:1156844492.126385.317480@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
My friend currently runs a corporation. I work as his secretary and he
wants to add my name to his s corp business checking account. However,
he overdrafts his checking account a lot and I was wondering if it
would affect me since I have a good relationship with the bank on my
personal accounts? Also, if anything happens to the corp, would i be
held liable?
No liability will follow just because your name is on the account. Signing
checks can create liability. You will have personal, criminal liability if
you knowingly sign a check when there are insufficient funds in the account.
Technically, you won't have liability if you issue a good check and then
your boss issues one which exhausts the funds before your check clears, and
your check bounces. But even though you are innocent in that situation, you
should not put yourself in a position where it could become necessary for
you to defend yourself in a criminal court.
It gets worse. If you write a good check and then the boss empties the
account with another check before the check you wrote clears, it wouldn't
take much in the way of additional facts to escallate the situation into a
criminal conspiracy. All that would be needed in the average prosecutor's
opinion would be a conversation which establishes that your knew that the
overall scheme would likely result in one of the checks being dishonored.
One option is to refuse to allow your name to be placed on the account
unless you are given responsibility for writing all of the checks. That
way, you can decline to write one when outstanding checks exceed account
funds.
One option is to allow your name to be placed on the account and make some
rules:
"Rule 1. I will never sign a check without knowing that the account
contains sufficient funds.
Rule 2. If you tell me to sign a check when we both know that the account
contains insufficient funds, I will resign immediately, without notice.
Even asking me to do that would be solicitation of a felony. I won't commit
any crime and I won't work for anyone who would try to involve me in a
crime.
Rule 3. If I write a good check and you write one which exausts the account
and results in my check being dishonored, I will resign immediately, without
notice."
This answer must not be relied on as legal advice for the reasons posted
here: http://mcgyverdisclaimer.blogspot.com
McGyver
.
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