check signing

[Guest Dr. Daniel Ginsberg]

Is it appropriate to state in the bylaws who signs and co-signs checks? Treasurer? President? Secretary?

[Gary Novosielski]

Is it appropriate to state in the bylaws who signs and co-signs checks? Treasurer? President? Secretary?

Sure. You could list it as one of their duties.

[hmtcastle]

Is it appropriate to state in the bylaws who signs and co-signs checks? Treasurer? President? Secretary?

Yes, it's appropriate to put that in the bylaws, though it's just as appropriate to include it in your Standing Rules. It depends on how difficult you want it to be to change it.

[Chris Harrison]

Sure. You could list it as one of their duties.

...But you probably will want to authorize more than one officer to be able to sign checks, pay bills, etc. We have seen enough times here where a duty is specifically delegated to a single officer and that officer resigns/is removed from office/dies and then no one can validly perform that duty.

[Rev Ed]

I have seen two variants for co-signing:

1) All cheques will be signed by two officers (or two members of the Board.)

2) All cheques will be signed by the Treasurer and another officer/director.

[David A Foulkes]

You might also verify with the bank whether they require one or two signatures, the latter often coming with an extra per-check fee. While the bylaws may require two signers on the check, if the bank will cash it with just one signature, it would be possible for one of the signers to write themselves a check and cash it, and by the time you find out, they'll be gone with the money. Not to cast dispersions, but if security is a concern, that's another consideration.

[hmtcastle]

While the bylaws may require two signers on the check, if the bank will cash it with just one signature, it would be possible for one of the signers to write themselves a check and cash it, and by the time you find out, they'll be gone with the money.

The bank will only do what the check authorizes it to do. If the check requires two signatures, or is not valid for amounts over $500, or is not valid after 90 days, then the bank will (theoretically) honor those restrictions.

[David A Foulkes]

The bank will only do what the check authorizes it to do. If the check requires two signatures, or is not valid for amounts over $500, or is not valid after 90 days, then the bank will (theoretically) honor those restrictions.

Those are certainly methods often in use. We have single signature checks but if we want our bank to check for two signatures (as required by our bylaws), they will charge us extra. Otherwise, as long as at least one of the signers of record have signed it, they will cash it. Perhaps if we use checks with double signature lines, there would be no extra per check charge. I will certainly look into this. Thanks for the thought.

[E A Lemoine]

Those are certainly methods often in use. We have single signature checks but if we want our bank to check for two signatures (as required by our bylaws), they will charge us extra. Otherwise, as long as at least one of the signers of record have signed it, they will cash it. Perhaps if we use checks with double signature lines, there would be no extra per check charge. I will certainly look into this. Thanks for the thought.

The problem with the restrictions on the checks it they are often not enforced by the banks. If you have an organizational rule that checks require two signatures, if you have an audit committee, they should verify that the officers are indeed following this rule.

Further, if you bank with XYZ Bank and they say they'll enforce a two signatures are required restriction (which most generally won't do), and I go deposit it into my ABC Bank account, it often just passes through in the bank end and verifying two signatures exist is an afterthought as the check clearing process is automated.

As for the original question, naming who can be a signer of checks is fine within the bylaws or a standing rule, so long as it is a duty of an officer and not naming an individual within the bylaws. Banks generally prefer a resolution or minutes which can show an individuals authorization to be a check signer if you're trying to open an account or modify the signers.

[hmtcastle]

Further, if you bank with XYZ Bank and they say they'll enforce a two signatures are required restriction (which most generally won't do), and I go deposit it into my ABC Bank account, it often just passes through in the bank end and verifying two signatures exist is an afterthought as the check clearing process is automated.

Yes, the process is automated and signatures are not verified (even if only one is required). But the restrictions should protect you after the fact if the bank fails to honor them.

[Kim Goldsworthy]

Is it appropriate to state in the bylaws who signs and co-signs checks? Treasurer? President? Secretary?

Are you asking if the bylaws is the place to write down the rule?

Are you asking if the Tr. or P or Sec. ought to sign?

Thus my suggestion:

1. choose between

(a.) bylaws vs.

(b.) standing rules;

as to where to put your rule.

2. choose between

(a.) specifying a generic (say) "two officers" and leave up to the bank WHICH TWO OFFICERS THE BANK'S RULE DEMANDS; vs.

(b.) specifying the two officers BY NAME and run the risk of having your new rule conflict with the BANK's rule.