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Cannot Deposit Check made out to Holding Company
Our company received a check payable to our holding company, which is not an active corporation. Our bank won't let us deposit it into our regular bank account under this name. Since our CEO is an officer of the holding company, can he endorse the check over to our active day-to-day business company, which is where the check should have been made payable to in the first place? This is urgent as the check is for $1M.
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 If your CEO has the legal authority to make an endorsement on behalf of the holding company, which might not be the case, particularly since the holding company is inactive, he could endorse the check to the operating company. However, your bank might not be willing to accept the check for deposit, because of the third-party (holding company) endorsement. As an inactive corporation, it might not be legally capable of granting its CEO the authority to endorse the check. Your company should consult an attorney to find out whether the inactive holding company can act, or it may have to try to arrange with the remitter of the check to reissue it to the operating company.
Published on BankingQuestions.com 5/04/09
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