Does your LLC need a “real” business bank account? Or can you just get away with a personal bank account where you only keep the LLC’s money?

That’s what we are covering in this week’s episode of Ask Kiff.

The short answer is that you must keep the LLC’s money in its own name. Because if you don’t it’s not really the LLC’s money.

And your bank is likely going to require that if the account is in the LLC’s name, that you have a business account.

Watch the video | Read the show notes | Read the transcript

Show notes

• I use Novo as the bank for my LLC. Use this link to sign up and we’ll both get $40!
• Curious what other tasks you should be doing to keep your LLC’s fence strong? Then grab the PDF below.
• Want my help creating your LLC (or keeping your existing LLC legit)? Then learn more about my LLC course here.
• Want to hire an attorney to create your LLC instead of DIY’ing it? Then watch this episode of Ask Kiff to learn how to find the right attorney.
• Think that you might use LegalZoom rather than hiring an attorney? Then watch this episode of Ask Kiff to learn when it is (and isn’t) a good idea.
• Learn more about the artist’s Courtyard membership community here.
• Leave a question or sign up to vote on future episodes here

Transcript

In this week’s episode, we’re gonna break down if your LLC needs to get a “real” bank account or if you can get away with having a personal account where you only keep the LLC’s money.

Hi, I’m Kiffanie Stahle, founder of the artist’s J.D. A place designed to add ease to the legalese of running your creative business.

This week’s question comes to us from Kristen in New York. She asks,

Does my LLC need a real business bank account or can it be its own personal account?

This is one of the more common mistakes that I see brand new LLC owners make. And that’s not treating their LLC’s money, like the LLC’s money. And continuing to treat it like their own money.

The reason you created an LLC was to put a really strong fence between your personal life and your business life.

So if anything went wrong on either side of the fence, the other one wasn’t impacted.

And when you went through that process of getting that LLC paperwork filed, you created a fake legal person.

The LLC is its own legal entity. It is its own “legal person”. And because of that, the LLC needs to have the things it owns in its own name. Otherwise, it’s not really owned by the LLC.

And so when you create an LLC, the LLC’s money needs to be in the LLC’s name.

And most banks, if it’s going to be in the LLC’s name, are going to require you to have a business bank account.

So just putting the LLC’s money in an account underneath your own name and knowing that it’s just the LLC’s money, isn’t making sure you have a strong fence.

It’s punching holes in that fence. And you are saying you’re not treating your LLC like an LLC.

So this is one really important task that you need to do once you have your LLC. Or if you already have an LLC you’re going to go ahead and do it today. And that’s making sure that the LLC’s money is in the LLC’s name.

Curious what other tasks you should be doing for your LLC? Then grab the checklist below. It takes you through the one-time and ongoing tasks you are going to need to complete in order to keep your LLC’s fence really strong.

And if you want some hand-holding as you go through this process, I’ve got a course that walks you through exactly what you need to do in order to keep your LLC legit.

In next week’s episode, we’re going to cover another big financial mistake that new LLC owners make. And that’s not having a system in place to make sure that they’re paying themselves only the profits of the business.

Got a question you want me to cover in an upcoming episode? Leave it here or in the comments below.