Using a New Personal Bank Account for an LLC?


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Business Structure: LLC

Country: US

State: Texas

City: Austin

Income: So far? $0

I am forming an LLC and was looking into "business" checking accounts, and most charge some kind of fee. Either monthly, per transaction, or both. Meanwhile, "personal" checking accounts usually do not.

Now, I know that I need to keep business and personal finances separate, especially in the case of an LLC, but does my business account have to be a "business" account, or just a separate "personal" account.

I saw a few questions similar to this one, but they all just reiterate the same "always keep personal and business assets separate" line.

My question is: Does my business checking account have to be a "business" account, or can it just be a separate "personal" checking account, but dedicated to business assets.

LLC Bank Account

asked Mar 21 '13 at 13:25
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Kevin Soviero
180 points

1 Answer


1

From legal perspective there's no difference between "business" account and "individual" account. Its the terms of usage of the bank that vary. Business accounts cost more to maintain, and the bank will know that its a business account so I doubt it will be opened as "individual". Remember, it has to have the LLC as the account owner.

Technically, you can have your personal account (not in the name of the LLC, but in your own name) be used for the LLC finances, but that's only assuming you're not opting in to be taxed as a corporation, and not going to receive checks payable to the LLC. It is also an opening to piercing the corporate veil. You should always keep your personal and business finances separate, and using a personal account for LLC finances may invalidate the limited liability protection the LLC provides, thus rendering it useless. So while you won't be breaking any laws by that, in case you're in need of that limited liability, trying to save a couple of dollars a month can cost you the whole and unlimited liability later.

Talk to your Texas attorney and CPA for more details and local specific legal requirements.

BTW: shop around. You can find a business account without fees (assuming its a small business). Check your local credit unions too.

answered Mar 21 '13 at 13:32
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Littleadv
5,090 points
  • I updated the question to reflect the business size. In short, yes it is a small business. Very small. ;) – Kevin Soviero 7 years ago
  • @Kevin I got a free account for my LLC at the local Wells Fargo branch, they only want me to move $100 back and forth to a savings account monthly, that's it. – Littleadv 7 years ago
  • The question you need to answer is, does doing this violate the terms of the agreement you made with the bank to open the account? If it does, the bank may be able to close your account, fine you, charge back fees, or??? – Gary E 7 years ago
  • I have a free business checking account for my LLC with CapitalOne, I just had to throw a couple hundred bucks in to open the account. But after that there's not really a minimum balance. – James Adam 7 years ago
  • I just looked into CapitalOne, and they're not bad. It's free if you have under 500 transactions a month and under $10,000 cash deposits... I'm not worried about exceeding those limits any time soon! ;) – Kevin Soviero 7 years ago

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