Can I Use My Personal Bank Account for My LLC?

If you’re about to open your business to customers, you might be wondering, “Can I use my personal bank account for my LLC?” Is it even worth the hassle to open a business bank account? Why does it matter?

The short answer: it’s best practice to save your personal bank account for your personal use and keep a dedicated business account. In this guide, we’ll cover what a business bank account is, the types of accounts you might open, and why at least one business bank account is a good idea.

What is a business bank account?

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 your limited liability company, you’ll probably need 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. Your bank might also ask to see your business license report or your operating agreement, but that varies from one bank to another.

Reasons to Have a Separate LLC Bank Account

The benefits of a business bank account far, far outweigh the risks, from liability protection to professionalism and accepting credit card payments.

If you’re worried about the cost of opening a business bank account, don’t worry — our small business banking partners can help.

Liability Protection

The most important reason to maintain a business bank account is that it helps maintain your personal asset protection. An LLC has a corporate veil that usually prevents creditors from seizing your personal assets if the LLC gets into financial or legal trouble. But that corporate veil only lasts when the LLC is run compliantly. If 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. You shouldn’t intermingle your business and personal finances. A separate bank account makes it easier to do that.

Making Taxes and Bookkeeping Easier

When you have to balance your checkbook or prepare your expense reports for tax season, the last thing you want is extra work. But if you had a combined personal and business bank account, you’d have to sift through hundreds of expenses to isolate your business expenses and profits.

Maintaining a dedicated LLC bank account saves you from that hassle. You can easily consult your bank statements for a full look at your business’s finances. Plus, it’s easier to prove your tax documents in an audit when you use a business account exclusively.

Showing Professionalism

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 your entire business the paragon of professionalism. But it’s a big step in the right direction.

Establishing Credit with a Business Credit Card

While you don’t have to get a business credit account, it can be advantageous. Just like individuals, businesses can have good or bad credit. And building a good business credit card score can give you more purchasing power down the road. Later on, you might find yourself looking to buy an expensive piece of equipment. A good credit score can help you get the best small business loan or credit limit you need to make that happen.

A business credit card can also be a helpful tool to keep your cash flow going while you’re 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 your business growth rate.

Ability to Accept Credit Card Payments

Opening a merchant account can be another key business decision because it can allow you 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: you’d hate to send a would-be customer (and their money) away because you couldn’t take a debit card transaction.

We can help!

Dealing with business finances can feel overwhelming, but you don’t have to go it alone. ZenBusiness can help. Whether you need to get an EIN, you’re ready to open your first business bank account, or you want a streamlined app for managing your money, we’ve got your back. With our help, you can stress less about red tape and focus on what really matters: helping your business succeed.

ZenBusiness is a financial technology company and is not a bank. Banking services provided by Thread Bank, Member FDIC. The ZenBusiness Visa Debit Card is issued by Thread Bank pursuant to a license from Visa U.S.A. Inc. and may be used anywhere Visa debit cards are accepted. FDIC insurance is available for funds on deposit through Thread Bank, Member FDIC.

*Your deposits qualify for up to a maximum of $3,000,000 in FDIC insurance coverage when placed at program banks in the Thread Bank deposit sweep program. Your deposits at each program bank become eligible for FDIC insurance up to $250,000, inclusive of any other deposits you may already hold at the bank in the same ownership capacity. You can access the terms and conditions of the sweep program at https://thread.bank/sweep-disclosure/ and a list of program banks at https://thread.bank/program-banks/. Please contact customerservice@thread.bank with questions regarding the sweep program.

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.