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2 Replies Latest reply: Sep 7, 2008 8:01 AM by LUCKIEST RSS

LLC Bank Account Question

mercilus Newbie
Currently Being Moderated

I am the only member of a new LLC formed in Ohio. My question is in relation to bank accounts.

Can I use a personal checking account to conduct the business from. As I understand it as long as I use this account strictly for the LLC it will not "pierce the veil" of protection.

The reason I want to do this and not a business checking is the fees for the banks in my area are in my opinion rediculous. So if I can just open up a personal checking account strictly for my LLC it would be best and save money.

Thanks for your replies.
  • Re: LLC Bank Account Question
    LUCKIEST Master
    Currently Being Moderated
    LLC Bank Account Question, Welcome

    Everybody in business should have an Accountant and a Lawyer

    This is just my personal option, BUT to be in business and make money, you need to spend money and banking fees is like advertising. When you issue a check to pay your bills, who name is going to be on the check?? The LLC name or mercilus name??

    *If and when the I R S comes to audit you, they will NOT look at the name on the account they will look to see that all income goes into said checking account so long as you do *not "pierce the veil".

    Final thought. If somebody sues the LLC and your name is on the check, what happens??

    Ask your Lawyer, LUCKIEST
  • Re: LLC Bank Account Question
    Lighthouse24 Master
    Currently Being Moderated

    +Can you+? Yes.

    +Should you+? If this is a sideline/part-time business, it probably won't matter. If you're serious about growing your firm, it might -- because you may eventually need the capability to transfer funds, setup merchant accounts, handle payroll, etc. (services that will require a commercial account). So can't you just open business checking account then? Yes, but it might be easier (and you will probably get better rates on those services) if you already have an established relationship with a bank and banker, and have shared your plans for those stages of growth in advance.

    As far as ridiculous fees being the hang-up, I'd say keep shopping -- major banks (including the one that sponsors this site) offer no fee packages for small business that don't have a lot of transactions (most only require that you keep a minimum balance of around $3,000).

    A final thought is that a personal checking account is linked to you by your SSN, whereas a business account is linked to your LLC by its EIN. I'm not an accountant or lawyer, but it seems to me that YOU writing a check is not the same thing as YOUR LLC (a different legal entity) writing a check.

    Best wishes.

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