Can Square be transferred to another person?

Square: Why You Can’t Just Hand Over Your Account

Thinking about selling your business or simply transferring your Square account to someone else? You might be surprised to learn that you can’t. Unlike tangible assets, your Square account is inextricably linked to you or your business, making it non-transferable.

This might seem inconvenient, but the restriction is rooted in security and compliance – two pillars crucial for maintaining a trustworthy payment processing environment. Here’s why Square doesn’t allow account transfers and what you need to do instead if your business ownership changes.

The Foundation of Security: Tied to Specific Information

Square accounts aren’t just usernames and passwords; they’re deeply integrated with your personal and business registration details. This includes your:

• Legal Name: The name associated with your bank account and tax identification.
• Business Information: Details about your business structure, including its legal name and EIN (Employer Identification Number) if applicable.
• Bank Account: The account Square uses for depositing your earnings.
• Taxpayer Identification Number (TIN): Your Social Security Number (SSN) or Employer Identification Number (EIN), used for tax reporting purposes.

This detailed information is essential for Square to verify your identity, comply with anti-money laundering regulations, and accurately report income to the IRS. Allowing someone else to take over your account would circumvent these crucial security measures and potentially open the door to fraudulent activity.

Compliance is Key

Financial institutions like Square are heavily regulated. They must adhere to strict Know Your Customer (KYC) and anti-money laundering (AML) requirements. These regulations require them to verify the identity of their users and monitor transactions to prevent illicit activities.

By preventing account transfers, Square ensures that the person responsible for the account is also the person whose identity has been verified. This compliance is vital for maintaining Square’s integrity and ensuring it can continue to provide payment processing services.

What Happens When Ownership Changes?

So, what happens if you sell your business, or if ownership changes for any other reason? You can’t simply hand over your Square account. Instead, the new owner will need to:

1. Close the Existing Account: The current account holder must close the existing Square account linked to their personal or business information.
2. Create a New Account: The new owner must create a brand new Square account, providing their own personal and business information. This allows Square to properly verify their identity and ensure compliance.

The Benefits of a Clean Slate

While the process of closing one account and opening another might seem like a hassle, it offers several advantages:

• Accurate Financial Reporting: Ensures that all transactions are correctly attributed to the new owner for tax purposes.
• Independent History: Allows the new owner to build their own credit history with Square, potentially leading to access to additional features and services.
• Clean Break: Prevents any potential confusion or liabilities associated with the previous owner’s account.

In Conclusion

While transferring your Square account might seem like a convenient option, the reality is that it’s not possible due to security and compliance requirements. Instead, closing the old account and creating a new one under the new owner’s information is the necessary and recommended course of action. This ensures a secure and compliant transition, allowing the new business owner to seamlessly integrate Square into their operations.