How should a check made out to a business be endorsed?

How should a check made out to a business be endorsed?

• A. It should be endorsed by the owner using the owner's personal name only
• B. It should be endorsed by stamping the business information or writing the DBA name
• C. It should be endorsed by the bank's endorsement stamp
• D. It should be endorsed under the business name

Answer: (D)

When a check is written to a business, the endorsement should reflect the business as the rightful payee and be signed by an authorized representative of the business. Endorsing under the business name makes it clear who owns the funds and which account should receive them, helping ensure the money is deposited into the correct business account and that the signer has proper authority. This avoids transferring funds to an individual or creating ambiguity about who can negotiate the instrument. The other options either put the personal owner in control, use a DBA stamp without showing authorized authority, or rely on a bank stamp that doesn’t represent the business’s endorsement. By endorsing under the business name, with an authorized signature, the bank can credit the correct entity and confirm proper authorization.

When a check is written to a business, the endorsement should reflect the business as the rightful payee and be signed by an authorized representative of the business. Endorsing under the business name makes it clear who owns the funds and which account should receive them, helping ensure the money is deposited into the correct business account and that the signer has proper authority. This avoids transferring funds to an individual or creating ambiguity about who can negotiate the instrument. The other options either put the personal owner in control, use a DBA stamp without showing authorized authority, or rely on a bank stamp that doesn’t represent the business’s endorsement. By endorsing under the business name, with an authorized signature, the bank can credit the correct entity and confirm proper authorization.