Cashing a check on a business with no bank account

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Raybo
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Cashing a check on a business with no bank account

Post by Raybo »

I am retired. When I worked, I worked for Raybo Co, which was a sole proprietorship (Schedule C). In 2004, I closed the bank accounts associated with that business.

Note that I still do get paid for some work but my only client pays me with checks in my name, so cashing them is not an issue. Thus, I have reasonably current Schedule C's (maybe 2012) I can show to people.

Recently, I got a settlement check from the State of California as part of a class-action suit (that I wasn't even aware of) for $22 made out to Raybo Co.

I went to the bank and even after showing them the Schedule C with both my name and the company's name could not get the check cashed.

I would try to deposit in the ATM but I'm afraid that somewhere along the way it will get noticed by some machine (are any humans involved with check processing anymore?), get rejected, and then I'll get hit with some humongous returned check fees.

While $22 isn't a big deal, I can't yet bring myself to simply shred. I thought maybe someone here might have some ideas.

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lthenderson
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Re: Cashing a check on a business with no bank account

Post by lthenderson »

Do you have a smart phone and a bank that allows deposits via the phone? I do and that is my first attempt on checks that I'm not sure they will cash. If it doesn't go through, it just sends you an email letting you know and end of story. Best of all, you still have the check to pursue other avenues.

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Raybo
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Re: Cashing a check on a business with no bank account

Post by Raybo »

livesoft wrote:Can you add "Raybo Co" to the title of your current checking account? Then remove it later?

I was told that I couldn't open a business checking account without all kinds of paper work. The person at Chase seemed to be concerned about "Taxes." I didn't mention the fine they paid for fixing LIBOR, which apparently didn't concern them at the time.

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Raybo
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Re: Cashing a check on a business with no bank account

Post by Raybo »

lthenderson wrote:Do you have a smart phone and a bank that allows deposits via the phone? I do and that is my first attempt on checks that I'm not sure they will cash. If it doesn't go through, it just sends you an email letting you know and end of story. Best of all, you still have the check to pursue other avenues.

Good idea.

I tried doing this but apparently my iPhone can't take an image that the on-line bank I use can read. I tried it several times. A few more times and I'll be below minimum wage!

No matter how long the hill, if you keep pedaling you'll eventually get up to the top.

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Raybo
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Re: Cashing a check on a business with no bank account

Post by Raybo »

What happens to the $22 when I destroy the check? Will it go to the state? Back to Dell?

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dm200
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Re: Cashing a check on a business with no bank account

Post by dm200 »

Since this is a very small amount AND it is legitimately yours, I would just try to slip it through a personal account at a bank or credit union.

Maybe endorse the back with something that looks "official", shows deposit to the account of _____ (your name) and act no. Put it in an ATM or night deposit with as many other checks as you can - and stick this one in the middle.

Lafder
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Re: Cashing a check on a business with no bank account

Post by Lafder »

Is it from an actual bank on behalf of the state of California ? You could potentially cash it at the bank it is written on with your proof of business name.

Also you can try to get it reissued to your name.

From your bank's perspective, if they cash a check made out to the company name, they do not have an established relationship with that company or the check issuer to it would be hard for them to get paid back if it was a bad check.

Lafder

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Steelersfan
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Re: Cashing a check on a business with no bank account

Post by Steelersfan »

dm200 wrote:Since this is a very small amount AND it is legitimately yours, I would just try to slip it through a personal account at a bank or credit union.

Maybe endorse the back with something that looks "official", shows deposit to the account of _____ (your name) and act no. Put it in an ATM or night deposit with as many other checks as you can - and stick this one in the middle.

Bingo!

And if it gets past the first person in the branch that processes it, it will sail through the rest of the way, nolo problemo.

Since you're depositing it into your account, if that first person has an issue with it and they know how to contact you, they will. Branch personnel has very little else to do these days.

astrohip
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Re: Cashing a check on a business with no bank account

Post by astrohip »

I had a similar problem a while back. I endorsed the back with "ABC Corp, pay to astrohip", then the usual stuff after it (FDO and my acct #).

Bank had no problem since I wasn't cashing it, but depositing it. I guess they figured if it went bad they could grab it from my account.

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cherijoh
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Re: Cashing a check on a business with no bank account

Post by cherijoh »

Raybo wrote:Recently, I got a settlement check from the State of California as part of a class-action suit (that I wasn't even aware of) for $22 made out to Raybo Co.

I went to the bank and even after showing them the Schedule C with both my name and the company's name could not get the check cashed.

I would try to deposit in the ATM but I'm afraid that somewhere along the way it will get noticed by some machine (are any humans involved with check processing anymore?), get rejected, and then I'll get hit with some humongous returned check fees.

The issue is most likely recourse if the check bounces. Is it actually a state government check? Is it drawn on a bank with a nearby branch?
You don't need an account to cash a check at the bank upon which the check is drawn. You just have to prove identity.

As far as using your own bank, your problem was that you tried to cash it and brought the discrepancy in names to the attention of the teller. :oops: Just deposit it in the ATM. Unless the check bounces or the check is read by the ATM scanner for the wrong amount (which you will know when you deposit it), no human eyes will ever examine it in detail. It might be an issue it you tried to deposit a check made out to XYZ corporation and endorsed it as Raybo, but not if you used your name as part of your company name.

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dm200
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Re: Cashing a check on a business with no bank account

Post by dm200 »

As far as using your own bank, your problem was that you tried to cash it and brought the discrepancy in names to the attention of the teller.

I believe this is a case where it would have been a much better idea to NOT have asked about it and drawn attention to the "discrepancy".

"Better to ask forgiveness than permission"

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ResearchMed
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Re: Cashing a check on a business with no bank account

Post by ResearchMed »

Better yet, do you have arrangements where you can just deposit the check with an app when you photo it with your iPhone?

That's a time it is least likely for any human to eyeball all of the actual print.

There would probably only be a problem IF the payor claimed there was some fraud involved (which isn't really even the case here, if I understand it correctly - you were the only member of your business?).

It's pretty unlikely that anyone is going to spend a lot of energy trying to determine if such a small check "that appears to be deposited and cleared properly" really was "okay".

Even less so, for a class action suit, where you aren't a "biggie", but one of a big class.

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Raybo
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Re: Cashing a check on a business with no bank account

Post by Raybo »

dm200 wrote:

As far as using your own bank, your problem was that you tried to cash it and brought the discrepancy in names to the attention of the teller.

I believe this is a case where it would have been a much better idea to NOT have asked about it and drawn attention to the "discrepancy".

"Better to ask forgiveness than permission"

I didn't try to cash the check. I took my Schedule C to the person behind the desk in the branch, showed him the check and the tax form and asked if this was enough to deposit the check. Frankly, he seemed confused. My guess is whenever bank personal are confused, they are told to say no, except when fixing LIBOR, of course.

My bank charges more than the check is worth if it is returned. Another option is to write the Sec'y of State, explain my dilemma and see if another check will be issued. For $22, it just doesn't seem worth it.

No matter how long the hill, if you keep pedaling you'll eventually get up to the top.

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dm200
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Re: Cashing a check on a business with no bank account

Post by dm200 »

ResearchMed wrote:Better yet, do you have arrangements where you can just deposit the check with an app when you photo it with your iPhone?
That's a time it is least likely for any human to eyeball all of the actual print.
There would probably only be a problem IF the payor claimed there was some fraud involved (which isn't really even the case here, if I understand it correctly - you were the only member of your business?).
It's pretty unlikely that anyone is going to spend a lot of energy trying to determine if such a small check "that appears to be deposited and cleared properly" really was "okay".
Even less so, for a class action suit, where you aren't a "biggie", but one of a big class.
RM

Generally I agree that such a small amount is very unlikely to draw scrutiny from an inadvertant acceptance/deposit of this item.

HOWEVER , based on some things I have seen in the financial industry, an employee of a bank or credit union who knowingly and intentionally accepted such a deposit might be subject to disciplinary action. Suppose, for example, that this bank or credit union had a history (or a perceived history) of lax enforcement of rules, money laundering, failure to check government list of "bad guys/gals", etc. It might be the case that a detailed "audit" of each and every transaction might bring this up - then suppose there is something in the record/files that this was done intentionally.

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Zabar
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Re: Cashing a check on a business with no bank account

Post by Zabar »

My wife recently had something similar happen. She used to have a Sub-S corporation (HerName, Inc.) that she used for writing income. She and I were the only shareholders. We let it lapse a year ago when we moved to California and opened HerName, LLC that serves the same purpose.

A month ago she received a check for about $1200 in royalties made out to the now-defunct corporation. We went to the bank to discuss how to deposit it. Since it was obviously intended for her, the manager only wanted to make sure that there weren't any other shareholders in the corporation that she might be trying to hide money from. Once he checked the bank's records on the defunct corporate account, he approved the check's deposit into her LLC account.

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Re: Cashing a check on a business with no bank account

Post by retiredjg »

I like the 2-party approach mentioned above. If Raybo the person can legally endorse a check made out to Raybo Co. then Raybo can make it payable to Raybo the person. Then Raybo the person can deposit it in Raybo's account. If it clears, they won't ask any questions.

I'm assuming that 2 party checks are still legal. People just don't use it any more.

I'd keep an extra $22 in the account for several months in case something goes awry.