Can I deposit a personal check into a business account?
Los Angeles, CA |
I just formed a LLC and am in the process of changing my invoices over to my business name. In the meantime, if I receive a check written to me and deposit it into my business checking account would that be considered commingling my name and assets?
To be on the safe side, I would not deposit the check into your business account. If your business account needs money, make a loan from you personally to your business or document an equity infusion.
The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of California. Responses are based solely on California law unless stated otherwise.
It's a bad idea which risks letting a claimant "pierce" the "corporate veil" that the LLC is designed to protect. You need to keep your individual business scrupulously separate from your business affairs so you don't invite lawsuits against you personally, and this is particularly important when it comes to commingling money.
You're best off hiring a business lawyer and hiring a CPA to help you run this business properly.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
Although the other answers regarding commingling of funds are correct, a new business is entitled to be capitalized--and usually is--with funds belonging to the owner(s). If the check to be deposited is to be used by the business for business purposes, then such a deposit is permissible if your bank will allow it. Since you will personally pay taxes on all LLC profits, you are also entitled to have a capital account, which consists of funds you either contribute to the business initially or profits that you leave in the business. If, however, the business account is just used to "launder" the check for an illegal purpose (such as tax avoidance, hiding assets, etc.) then you are exposing yourself to potential civil damages or criminal penalties.
The above response does not create an ongoing duty to respond to questions. No attorney-client relationship is formed by this response, which reflects only the opinion of the author. The response should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question and could change if additional facts were made available. The Attorney is licensed to practice law only in the State of California and his responses are based solely on California law unless stated otherwise.