OVERVIEW OF TYPES OF ACCOUNTS
- Corporate accounts
It must be ascertained which members of a corporation may trade in an account by having the corporation submit a resolution authorizing the opening of a cash account. This resolution, signed and sealed by the Secretary of the corporation, must identify the officers authorized to make transactions. This resolution is in addition to submitting the corporation’s charter and its by-laws.
In the case of a corporate margin account, the regulations require that the corporation’s charter and its by-laws provide for the authorization of margin accounts, and the corporate resolution should specifically authorize the opening of an account with margin facilities. This requirement is understandable since corporation may, through a margin account, in effect contract a binding debt obligation and hypothecate some of its assets; something that is quite different from an authorization for a simple cash account.