LLCs Eligible for Deposit Insurance

FEBRUARY 14, 2003


LLCs Eligible for Deposit Insurance

The FDIC has determined that banks organized as a limited liability company (LLC) are eligible for deposit insurance. Allowing banks to use the LLC structure was recommended by the ICBA in its study on Community Bank Tax Relief & Simplification Options. If existing IRS interpretations can be changed to give banks organized as LLCs favorable "pass-through" tax treatment, the LLC structure will give community banks another option in addition to the Subchapter S structure. Four states currently allow banks to organize as LLCs.

To ensure safety and soundness, the FDIC will require an LLC to have the four traditional attributes of a corporation: perpetual succession, centralized management, limited liability and free transferability of interests. The rule will take effect 30 days after it is published in the Federal Register.

All contents copyright 2014 Independent Community Bankers of America. All rights reserved.
Privacy Statement | Legal Notice