Business accounts

Businesses can open brokerage accounts at financial firms. Two common types of business accounts are:

Partnership accounts

Corporate accounts

Partnership accounts

In a previous chapter, we introduced a limited partnership. This type of business has at least:

One general partner, who manages the business

One limited partner, who invests in the business

A general partnership is similar, but it includes only general partners (two or more) and no limited partners. To open an account for either type of partnership, the firm must receive a partnership agreement along with the account application. The partnership agreement typically includes the business name, information about the partners, and each partner’s roles and responsibilities. The required partner information depends on the type of partnership:

A general partnership agreement includes information on all general partners. A limited partnership agreement includes information on all general and limited partners.

Partnership accounts are business accounts, not joint accounts.

Corporate accounts Corporations (S and C corporations) are businesses owned by stockholders. To open a corporate account, the firm must receive:

A corporate charter with a corporate seal

A corporate resolution

The corporate charter confirms the corporation’s legal status. The corporate resolution identifies which employees are authorized to act on behalf of the corporation for the account.

Key points

Partnership account

Business account for a partnership

Requires a partnership agreement

Not considered joint accounts

Corporate account

Business account for a corporation

Required to open:

Corporate resolution

Corporate charter

Corporate resolution

Names employees who can act on behalf of the business account