Does My Business Need a Checking Account?
Generally, the answer is no. There is no legal requirement that you have to have a separate checking account for your business. You can pay your business disbursements and obligations from your personal checking account.
Then why do so many people open a separate account for their business?The main reason, people want to keep their business affairs separate from their personal affairs. The reason for doing that is to ensure that the business obligations and liabilities remain with the business and do not flow to your personally.
That is why, the majority of people set up a corporation or a limited liability company (LLC) to operate their business. Thus allowing them to maintain that separation between business and personal affairs. Limiting their personally liability. If you have a separate business you have set up and use your personal checking account for the businesses bills, you are in a way, undercutting the fact that the business and you personally are separate by combining that aspect of your operation. having separate accounts ensures that you personally are not on the hook for your business obligations. Doing this helps to protect you personally from any future issues your business might have.
At qbo, we always recommend that you have a separate business checking account for each business that you own. Meaning that the business accounts will pay the business bills and your personal account pays your personal bills.
12/30/2019
By: Gary Grottke, CPA, Quality Back Office LLC