LLC Record Keeping
It's generally not recommended for business owners to use their personal bank accounts for their LLC. Doing so can blur the line between personal and business finances, potentially causing legal and financial issues. It's usually advisable to open a separate business bank account for an LLC.
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Last Updated: March 16, 2026
If an entrepreneur is about to open their business to customers, they might be wondering if they can use their personal bank account for their LLC. Is it even worth the hassle to open a business bank account? Why does it matter?
The short answer: it’s best practice for a business owner to keep their personal bank account for personal use and maintain a dedicated business account. This guide covers what a business bank account is, the types of accounts an LLC might open, and why at least one business bank account is a good idea.
A business bank account is an important tool for any business; it allows an entity’s owners to separate their personal and business funds completely. There are a wide variety of account types available: business checking accounts, business savings accounts, merchant accounts, business credit accounts, and more. These options aren’t one-size-fits-all, but it’s generally recommended for a business to have at least a business checking account.
To apply for a business bank account for a limited liability company, a business owner probably needs to have an employer identification number (EIN). This code acts like a Social Security number for a business, and most banks require one to open an account. It’s free to obtain one from the IRS. The bank might also ask to see the company’s business license or its operating agreement, but that varies from one bank to another.
The benefits of a business bank account far, far outweigh the risks, from liability protection to professionalism and accepting credit card payments.
If an entrepreneur is worried about the cost of opening a business bank account, ZenBusiness’s small business banking partners can help.
The most important reason to maintain a business bank account is that it helps maintain the LLC’s personal asset protection. An LLC has a corporate veil that usually prevents creditors from seizing the owner’s personal assets if the LLC gets into financial or legal trouble. But that corporate veil only lasts when the LLC is run compliantly. If it’s not, a judge might rule to pierce the LLC’s corporate veil, removing personal liability protection.
To be compliant, the LLC has to be treated as a separate entity from its owners, especially with its finances. The business owners shouldn’t intermingle their business and personal finances. A separate bank account makes it easier to avoid mixing those funds.
When a business owner has to balance their checkbook or prepare their expense reports for tax season, the last thing they want is extra work. If the owner had a combined personal and business bank account, they’d have to sift through hundreds of expenses to isolate their business expenses and profits.
Maintaining a dedicated LLC bank account saves a business owner from that hassle. The owner can easily consult their bank statements for a full look at their business’s finances. Plus, it’s easier to prove tax documents in an audit when a company uses a business account exclusively.
Some clients are hesitant to accept personal checks for business transactions; other clients reject them all together. But they’re often quite comfortable taking a business check. That’s because there’s an extra degree of professionalism with a business bank account — and with that professionalism comes more trust.
Granted, a business bank account won’t instantly make the entire business the paragon of professionalism. But it’s a big step in the right direction.
While a business doesn’t have to get a business credit account, it can be advantageous. Just as individuals can have good or bad credit, businesses can as well. And building a good business credit card score can give a company more purchasing power down the road. Later on, the owner might find themselves looking to buy an expensive piece of equipment. A good credit score can help a company get the best small business loan or credit limit it needs to make that happen.
A business credit card can also be a helpful tool to keep the cash flow going while the business is waiting for clients to pay their invoices. This can be especially helpful for businesses that need to purchase raw materials to make commissioned products. As long as lines of credit are used responsibly, they can make a big difference in the business growth rate.
Opening a merchant account can be another key business decision because it can allow the business to accept credit and debit card payments — even electronic payments. With so many customers feeling comfortable shopping online — or just not carrying cash anymore — card payments are a big plus.
Think of it this way: any business owner would hate to send a would-be customer (and their money) away because they couldn’t take a debit card transaction.
Dealing with business finances can feel overwhelming, but entrepreneurs don’t have to go it alone. ZenBusiness can help. Whether a business owner needs to get an EIN, they’re ready to open their first business bank account, or they want a streamlined app for managing their money, ZenBusiness has their back. With ZenBusiness’s help, business owners can stress less about red tape and focus on what really matters: helping their business succeed.
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Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.
It’s best practice to have a separate business bank account for an LLC. It facilitates the process of keeping personal and business finances separate. That’s absolutely essential to protecting an LLC’s corporate veil, making a business bank account invaluable.
For example, if an entrepreneur has a separate business debit card that’s distinct from their private card, they’ll be less likely to accidentally spend business funds on personal expenses (or vice versa).
What’s a “good” business choice varies from business to business. Generally, it’s best practice to create a business that’s distinct from its owner, which might require a unique name. But for some small business owners, naming their business after themselves makes sense.
If someone does go that route, they should be very, very careful to treat their LLC as a distinct entity.
Technically, there aren’t explicit laws that forbid business owners from using a personal bank account for their business. But doing so as an LLC is extremely risky because it’s very easy to intermingle business and personal funds and not treat the LLC like a separate legal entity. Using a personal account is also unsustainable if the LLC has multiple business owners.
Since it’s very easy to open a separate business bank account, it’s best to simply open one and avoid the risk.
Yes, provided the business owner follows the proper procedure. A business owner can transfer funds from their personal account to their LLC as a member contribution. These contributions should follow the procedure set out in the LLC’s operating agreement. (For more information, please see the operating agreement definition page.) It’s best practice to keep careful records each time a business owner makes a contribution.
Entrepreneurs should also remember that after they make a contribution, that money doesn’t belong to them anymore; it belongs to the LLC.
A sole proprietorship doesn’t offer personal asset protection, so there isn’t a corporate veil that needs to be maintained. That said, it’s still very helpful for a sole proprietor to maintain a business bank account to streamline their accounting and bookkeeping.
Every bank has slightly different terms for opening an account, so be sure to read the fine print. Some require a minimum initial deposit and charge a monthly maintenance fee if the applicant doesn’t meet their minimum balance requirements. Online banks tend to have better interest rates for savings accounts and checking accounts. Some banks charge termination fees when someone closes an account.
Additional Resources
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When it comes to compliance, costs, and other factors, these are popular states for forming an LLC.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.
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