Legal Question in Business Law in Arizona

Partnership requirements

Three senior citizens wish to sell handicraft items including hand paintings and bead necklaces. They wish to call the business "Very Merry Fairies" since the hand painting are of fairies, and would receive checks made out to that name. However, the bank advises them that they cannot open an account as a partnership with that name until they have legal partnership papers, and their only option is to open an account as a club.

Is this a legal requirement or only the opinion of the particular branch of the particular bank where they tried to open the account? Can't three individuals set up a bank account as a partnership and each sign and deposit checks withtout havnig to execute documents as a legal partnership?


Asked on 8/25/99, 6:09 pm

2 Answers from Attorneys
Stuart Williams

Re: Partnership requirements

Most states allow partnerships without a written agreement, I think, and would surmise that means yours does also. But it doesn't mean that every bank has to honor that.

Try another bank, first.

Also, you can write up a minimal agreement that defines your partnership, if you want, and present them a copy of that. Entitle it "Partnership Agreement." It'd be best to use a lawyer and let him set you up for real if you can either afford it now or convince a lawyer to extend the partnership a little credit and charge for it later.

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Answered on 8/27/99, 12:21 am
Stuart Williams

Re: Partnership requirements

Is there any reason why you don't want the bank to call it a club? Who cares what they call it as long as you can get the checks you need printed with whatever you want on it.

But check state law before you actually use the term Partnersip (or LLP or PC or Corp. or Inc. or LLC!) because they may not allow your use of such terms without the formalities of registering with them.

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Answered on 8/27/99, 12:23 am


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