Before proceeding with this article, we strongly recommend reviewing the article on Client Account vs. Exemption for Client Account for RCICs. Which Option is Best? for better context and understanding.
If you are considering using Client Account but are unsure which model to choose, the following insights may be helpful.
According to the definitions provided on page 6 of the CICC Client Account Regulation:
- Model 1: All monies received from clients must be deposited into the Client Account.
- Model 2: A licensee must deposit only unearned and unbilled monies into the Client Account.
The key difference between these models is the scope of funds that must be deposited—all funds in Model 1 versus only unearned and unbilled funds in Model 2.
For example, if an RCIC charges a client $2,000 for a PR application with the following payment milestones:
A. $1,000 at the time of service agreement signing (unearned)
B. $500 after document preparation and review (earned)
C. $500 after application submission (earned)
- Under Model 1, all payments (A, B, and C) must be deposited into the Client Account.
- Under Model 2, only the unearned amount (A) must be deposited into the Client Account, while the earned amounts (B and C) may be deposited into the RCIC’s personal or business account.
In summary, Model 2 offers more flexibility by allowing earned funds to be deposited directly into business or personal accounts, whereas Model 1 requires all client funds to be held in the Client Account.
Disclaimer: The provided inputs are based solely on observations and do not constitute legal advice. You are responsible for making your own decisions in accordance with CICC regulations.
