I. PARTNERSHIP TRANSACTIONS WITH A BANK There are two types of partnerships which the bank must be concerned with: (A) general or (B) limited.
A. General Partnerships A general partnership account is opened when 2 or more individuals have an unincorporated business formed either verbally or by a written partnership agreement. The partnership has its own tax identification number. All partners should sign a written consent to open the account by executing a partnership resolution and authorization – even those partners who will not sign on the account. If there is a managing partner, his or her signature will be sufficient to sign the resolution and authorization so long as the bank verifies such person is the managing partner by reviewing the partnership agreement. When adding new or revised partnership signatures to the account, a new resolution, authorization and signature card should be executed. A partner’s signature should not be deleted without that person’s written authorization. Again, a new resolution, authorization and signature card should be executed, with the signatures of the partners being deleted on the resolution, if still a partner.
B. Limited Partnerships The limited partnership is similar to the general partnership, but is formed by the Secretary of State on the office issues a Certificate of Limited Partnership. The limited partnership is made up of general partners (“managers”) and limited partners (“investors”) and has its own tax identification number. The general partners should designate who will be authorized to sign checks on the account or otherwise withdraw funds. The general partners should provide a signed written partnership resolution and authorization to open the account even if not all of the general partners are authorized to sign on the account.
The bank should also request a copy of the Certificate of Limited Partnership for its own records. Additions or deletions of signatures should be documented similarly to procedures used in the general partnership discussion above (new authorization, resolution and signature card).
The following is presented as an example of a partnership resolution and authorization and is not intended to be exclusive. You may wish to expand or restrict your documentation, but are cautioned to do so only after consultation with your bank counsel.
AUTHORIZATION AND RESOLUTION OF PARTNERSHIP TO OPEN ACCOUNT
Date
Whereas, the undersigned general partners wish to establish with Big Red Bank (the bank) a checking ( ), savings ( ) account(s) to be known as _____________________; And whereas, we hereby certify that the said name is a trade name which we use in the operation of an unincorporated business owned entirely by the undersigned as co-partners.
Therefore, be it resolved that
Checks and orders for the payment of money or the withdrawal of funds from said account(s) may be signed by ________________________________________________
(names of those authorized to sign; state whether checks and/or withdrawal slips shall bear one signature or shall be signed and countersigned;)
Checks, drafts, notes, bills of exchange and orders for the payment of money may be endorsed by any of the above or any of the undersigned, and deposited with the bank for the credit of said account(s); Such endorsements may be made in writing or by a stamp and without designation of the person so endorsing;
The undersigned authorize and request you to pay and charge to said checking account checks, obligations and orders for the payment of money drawn on or payable at, or which shall be paid or honored by the bank when so signed, whether payable to the order of any said signers or not; and also authorize the bank to receive deposits and conduct the said account(s) in accordance with the instructions stated above, in accordance with the deposit account contract and rules of the bank, as may be amended from time to time;
With respect to any savings accounts of ours, it is acknowledged and agreed that interest will be paid by the bank only as permitted by law (such law currently permitting the payment of interest on savings deposits, but only to the extent that such deposits do not exceed $150,000) and that withdrawals from any such savings account may only be made by means of crediting any amounts withdrawn to one or more of our checking account; and
If persons to this partnership are added or deleted or if the business should become incorporated, the undersigned will promptly notice the bank.