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bigduckontax
bigduckontax, Accountant
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Ltd Company bank account

Resolved Question:

I need to know about how a UK Ltd Company bank account is set up and the difference between signatories and ownership of the account. I set up a Ltd Co and was Director with 100% shares and my partner was Secretary but I stepped down as Director a good few years ago and my partner became Director and Secretary. There was no change in the shares at the time as the accountant didn't change anything. This isn't a problem for us but we need to know the official legal standing of things with the bank account. When asking the bank if we are joint account holders or if my partner is a signatory only, they advised he is a joint owner of the account, however if I own 100% shares, would my partner be classed as a signatory only or be a joint owner for the Ltd Company account? We need to know as my partner is US citizen and needs to declare bank accounts and state if he is an owner or joint owner or signatory only of the account.

So the question is, who owns the account? I don't know if the Limited Company owns the account, if so, would I be the owner (with 100% shares) and he is a signatory only?

Or is it considered a joint between us as we both signed a mandate when it was set up. The other issue to bear in mind is that he is Director and I am not but he has no shares in the company. I called the bank which is one of the major UK banks but the call center is outsourced and I cannot get a clear answer that I feel confident with.

Submitted: 11 months ago.
Category: Tax
Expert:  bigduckontax replied 11 months ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. The company and its directors and shareholders are separate legal entities. The company has a bank account, that is perfectly normal, but it is not a joint account. It is merely a bank account which has various signatories notified to the bank from time to time. What the bank told you was utter drivel, it is by now way a joint account. Many big companies run bank accounts where the signatories are merely company employees with no shareholdings in the company at all. The company owns the account, not any of the authorized signatories. I do hope that I have cleared the air for you in this matter.
Customer: replied 11 months ago.

Thank you for your answer, it is very helpful. Just to clarify my understanding on this matter based on what you have advised;

-When my partner completes the question on the form about how many accounts he owns, am I correct to say he should say tick that he is a signatory only, not a joint account holder on this Ltd company business account?

-So we are both only signatories on this account?

-Does that mean we both have equal responsibility on the account but ultimately the assets in the account are owned by the company so whoever owns the shares owns the assets in the account?

We were worried that based on what the bank told us, they would consider that we were joint owners which was a little confusing!

Thank you and I look forward to hearing from you to confirm on the above.

Expert:  bigduckontax replied 11 months ago.
He is merely a signatory. However I would not be inclined to mention this as this sort of form is designed to probe personal accounts. Correct, it is the company's account not yours. The company holds the assets, the shareholders do not. Of course the company's assets can be released to shareholders but only within the parameters permitted by the Articles of Association. The bank were talking rubbish and you should report the employee who told you this to his manager so their incompetence and ignorance can be exposed. I have never hear such balderdash and piffle! I am a Chartered Secretary and do have some knowledge of how companies are structured and operated. Please be so kind as to rate me before you leave the Just Answer site.
Customer: replied 11 months ago.

Thank you for clarifying this.

You mentioned that he should just include personal accounts, however the form states that you must include all accounts including any accounts where you have signatory authority. It is for US tax for something called an FBAR form. Is this something you are familiar with? I think the bank will disclose the business accounts to the US anyway as part of FACTA so would it be better to include? I understand if you are not able to answer this due to the nature of it being US Tax.

Thank you.

Expert:  bigduckontax replied 11 months ago.
This is an US requirement. I would immediately demand from the bank why they are requiring compliance with an US system. Personally I would tell them to mind their own business, but then I hate banks! So did my Mother, she had an old bank account with Barclays opened during the war when she was evacuated with the BBC Accounts Department to Evesham. She had not used it until the mid 60s when they complained that the account had not been run for so long. She did not reply merely paid in the moneys from the sale of our old London house and issued a cheque, printed during the war, to the solicitor for the new purchase leaving the account exactly as it was before!
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Category: Tax
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Expert:  bigduckontax replied 11 months ago.
Thank you for your support.

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