There are many reasons a person might receive a business check. Insurance payouts, rebates or refunds sent by mail, promotional prizes or for contracted work. Even government checks are classed as business checks.
When a business issues a check to a payee, it contains a special area on the back for endorsement. Unlike personal checks, which have a single signature line, a business check will have about 3 to 4 lines for signature purposes. Even companies that use online check printing services will have this special area on the back. That’s because business checks must encompass different types of endorsements.
A Check Written to a Single Individual
The person the check is payable to must be the person to endorse the check. In the space provided, write your name exactly as it is appears on the face of the check. If your name is misspelled, includes a middle initial or has a salutation, include that in the signature.
A corrected spelling can follow the signature. For example, sign” Jody Smith” on line one, and beneath write “Jodi Smith” as a corrected spelling.
A Check Written to two or More Individuals
The same rules apply as above, but all persons listed on the check must sign. If the payees do not have a joint account for deposit purposes, one individual can choose to make the deposit, as long as all parties have endorsed it.
A Check Written to a Business
A business receiving a check has a choice between a stamp and signature. Many larger companies do not give their employees signing authority and instead use a deposit stamp.
The stamp will be used in the signature area and usually states “For Deposit Only to acct# 123456”. Alternatively, a treasurer, bookkeeper, owner or other person with signing authority may write a signature on the check, usually accompanied by their title. For example, “Jodi Smith, Treasurer”.
A Check Written to an Individual and a Business
Many insurance companies issue joint checks to the individual and a service provider. In this case, both the individual and a representative from the business with signing authority must endorse the check.
The individual would sign according to the face of the check, and the business employee would sign their name and the name of the business. For example, “Jodi Smith, on behalf of Smith Automotive Repairs”. In this type of case, the business usually deposits the check and may wish to include “for deposit only to acct# 123456” as part of the endorsement as well.
For Deposit Only
Sometimes the payee is unable or unavailable to endorse a check but it still requires deposit. This is most likely to occur with insurance checks or government checks, if the payee is injured or otherwise unable to handle the process.
The check must be taken to the payee’s bank and marked “For Deposit Only to the account of Jodi Smith”. The appropriate account number is helpful, but if it’s not available, list the payee’s address and phone number beneath the endorsement, to ensure the bank can find the right account. Again, this type of deposit must be done in person.