Trading, Accounts & Prohibited ActsQuestion 240 of 398
When opening a cash account for a corporation, what document does the firm typically require to establish who is authorized to trade?
a.A copy of the CEO's personal tax return
b.The corporation's annual report to shareholders
c.A margin agreement signed by all shareholders
d.A corporate resolution naming the authorized individuals
Explanation
A corporate resolution (or its equivalent) identifies the officers authorized to act on the account. For a corporate margin account, the firm also needs to verify the corporate charter or bylaws permit margin trading.
Practice all 398 questions free — no signup required.
Related questions on this topic
- A brokerage account is registered as joint tenants with right of survivorship (JTWROS). One of the two owners dies. What happens to the account assets?
- Two business partners hold a joint account as tenants in common (TIC), with a 70%/30% ownership split. If the 70% owner dies, how are that owner's assets handled?
- In an UGMA or UTMA custodial account, who has the legal authority to make investment decisions while the beneficiary is still a minor?
- A customer wants to open an account for a revocable living trust. What document should the registered representative obtain to determine the trustee's powers?
- Which statement best describes the tax treatment of a traditional IRA?
- A qualified distribution from a Roth IRA is generally tax-free if the account has been open at least five years AND the owner meets which condition?
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against FINRA Securities Industry Essentials (SIE) Exam · How we review