Full question:
Does Missouri have a statute or bank policy that disallows a bank to permit an individual to cash a check made payable to a business.
- Category: Banking laws
- Date:
- State: Missouri
Answer:
The ability for an individual to cash a check made out to a business in Missouri often depends on their relationship to that business and the type of business involved. Generally, banks prefer that such checks be deposited rather than cashed, as this simplifies their policies and procedures. Depositing the check may cause a delay in accessing the funds.
If the business operates under a 'doing business as' (DBA) name, it may be easier to establish the individual's authority to collect the funds intended for the business. When the business account was opened, the bank's policies regarding check handling would typically have been discussed.
Negotiable instruments, like checks, must be properly endorsed. Checks made payable to a specific party require endorsement, while those payable to the 'bearer' do not. The law governing negotiable instruments is primarily state law, with all states having adopted some form of Article 3 of the Uniform Commercial Code (UCC), which specifically addresses negotiable instruments.
In summary, the rules around cashing business checks are specialized and can vary by bank policy and state law.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.