Series 7 practice questionmediumAccount Types — Corporate Accounts
When opening a corporate brokerage account, which document is required to identify the individuals authorized to trade on behalf of the corporation?
- AA corporate resolution✓ Correct answer
- BThe corporation's annual report
- CThe personal tax returns of the CEO
- DA personal guarantee from shareholders
Explanation
Why A — A corporate resolution
A corporate resolution is a document issued by the corporation's board of directors that specifies which individuals are authorized to trade securities and conduct transactions on behalf of the corporation. This document is essential for opening a corporate brokerage account and ensures the broker-dealer knows who is legally permitted to act for the entity.
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