Hold-Harmless Agreement

• Market Watch reports that business owners must deposit checks into business accounts before withdrawing any funds. Thus, in most cases, business owners cannot cash their checks directly; they must wait for the check to clear, then withdraw funds from their account as needed. However, if a business owner needs to cash a check immediately, he can sign a hold-harmless agreement with the bank. This agreement states that the business owner will not hold the bank responsible if the check bounces, or if an unauthorized person cashes the check.
  
  

Watermark on Check

• Many banks and check-cashing places look for watermarks as proof that the check is legitimate rather than a forgery. Your issuing bank takes care of printing watermarks when it issues your checks. If a check does not have a watermark, the teller may have to contact your bank to confirm that it does not use watermarks and that the check is a legitimate instrument from the issuing bank.
  
  

Authorized Signature

• The check must be endorsed by an authorized agent of the company. When you open a business checking account, you must provide the names of people who are authorized to make deposits or withdrawals. The bank will check whether the signature matches with the names of the people authorized to make transactions, and may ask you to show photo identification to prove you are one of the authorized signers. You may use a stamp to endorse checks as long as the stamp has previously been approved by the bank.
  
  

Pre-Printed Account Number

• The account number must be pre-printed on the check. While other information on the check may be handwritten, tellers cannot accept a check if the account number is written by hand. All banks issue checks with the account number pre-printed on the check, so if your check does not have a pre-printed number, you should not accept it from a customer. Contact your bank if prints checks for you without the account number.
  
  

Verifying a Check

• In addition to checking photo identification of the person cashing the check, bank tellers may need to verify that the check is legitimate, especially if the business is new or the check doesn't have a watermark. Most checks have information about the issuing bank printed on the front; the bank teller may call the issuing bank to verify that a check is legitimate, or it may place a hold on your deposit until it can electronically verify the check.