Account Registration Types

Now that you understand the different account structures, you need to know how accounts are registered, meaning who owns them and what happens to the assets when an owner dies.

Individual Accounts

• Owned by a single person
• Only the account holder can make transactions (unless trading authorization is granted to another party)
• Assets pass through the owner's estate at death (subject to probate) unless a Transfer on Death (TOD) designation exists

Think of it this way: An individual account is the simplest registration. One name, one owner, one person calling the shots. If the owner dies without a TOD beneficiary, the account goes through probate (a court process to distribute assets), which can take months.

Joint Accounts

Joint accounts are shared by two or more people. The critical exam distinction is what happens when one owner dies.

Memory Aid:

• JTWROS = "Right Of Survivorship" (survivor gets all, avoids probate)
• TIC = "In Common" (your share goes to your estate, requires probate)
• TBE = "By the Entirety" (married only, both must agree)

Key Rules for All Joint Accounts

• All joint account holders must sign the new account form
• Any joint tenant can typically place trades
• Checks must be made payable to all account holders (or require written authorization)

Exam Tip: Gotchas

• In a TIC account, when one owner dies, their share goes to their estate (not the surviving owner). In JTWROS, the surviving owner gets everything automatically. Look for the words "probate" or "estate" as clues pointing to TIC.
• TIC allows unequal ownership percentages, while JTWROS is always equal.
• Community property is available in only ~9 states and provides a full step-up in basis for both halves.

Sole Proprietorship Accounts

• Business account owned by a single individual operating under a business name (DBA, or "doing business as")
• The owner is personally liable for all business debts
• Account is opened in the business name with the owner as the authorized party
• The owner's SSN or Employer Identification Number (EIN) is used for tax reporting

Partnership Accounts

• Partnership agreement must be provided to the broker-dealer at account opening
• The agreement specifies which partners are authorized to transact
• General partners have authority to bind the partnership and trade
• Limited partners typically do not have trading authority
• The partnership's EIN is used for tax reporting

Exam Tip: Gotchas

• General partners can trade; limited partners cannot. The partnership agreement dictates who has authority, and limited partners are restricted to protect their limited liability status.

Corporate Accounts

• Requires a corporate resolution authorizing specific individuals to trade on behalf of the corporation
• The corporate charter or articles of incorporation may also be required
• Corporate accounts use the corporation's EIN

Exam Tip: Gotchas

• A corporate account needs a corporate resolution (a formal board document), not just a verbal or written request from an officer. Without it, the broker-dealer cannot accept trades.

Unincorporated Associations

• Includes clubs, organizations, and informal groups without corporate structure
• Requires documentation identifying authorized signers and the association's purpose
• The association's governing documents must specify who can act on behalf of the group