Pub. 5 2010-2011 Issue 6

March/April 2011 11 Extraordinary Service for Extraordinary Members. For more information, please contact Kansas Bankers Surety Co. at (785) 228-0000. nership, trust, business, club, association, or any other rep- resented person, the check must be used to pay a debt such corporation, partnership, trust, business, club, association, or represented person owes to the bank. A check made pay- able to the bank should not be cashed, used to fund purchase of a cashier’s check, or be deposited into any other party’s account. Otherwise, the bank will likely be liable if anyone claims the individual depositor was breaching a fiduciary duty to such corporation, partnership, trust, business, club, or association. If the bank accepts a check on which the payee is a corpo- ration, partnership, trust, business, club, association, or any other represented person, the checkmust be deposited to the account of the corporation, partnership, trust, business, club, association, or represented person. If the bank allows the check to be either cashed or deposited to some other account, the bank will likely be liable if anyone claims a fiduciary was breaching a fiduciary duty to such corporation, partnership, trust, business, club, or association. This is still true even if the person endorsing the check on behalf of the corporation, partnership, trust, business, club, association, or represented person has actual authority to endorse checks on its behalf. It is not an issue of the signature being unauthorized or forged; it is that, as a matter of law, the bank had notice of the breach of duty of the fiduciary. The only way funds should change ownership from a cor- poration, partnership, trust, business, club, association, or represented person to another person or entity is for a check to be drawn on that account made payable to the individual recipient of the funds. Z The only way funds should change ownership from a corporation, partnership, trust, business, club, association, or represented person to another person or entity is for a check to be drawn on that account made payable to the individual recipient of the funds. GENERAL CORPORATE - REGULATORY COMPLIANCE COMMERCIAL LOANS - TIF/BOND FINANCING DIP FINANCING - BANKRUPTCY/CREDITORS’ RIGHTS 1125 South 103rd Street Omaha, NE 68124 koleyjessen .com PRACTICAL ADVICE. EFFECTIVE SOLUTIONS. RESULTS DRIVEN