<\/span><\/h3>\n\n\n\nThe last step for LLCs to complete to make sure they have the proper business foundations is to open a bank account specifically for their business. <\/p>\n\n\n\n
Many business owners forget or overlook this step, but it\u2019s an important one that you won\u2019t want to skip. A lot of people use their own personal bank accounts for both business and personal transactions and then try to determine the difference between the two later for federal tax purposes. Of course, it seems simpler to use one bank account for everything, but there are two important reasons not to do this. <\/p>\n\n\n\n
The first is that it\u2019s much simpler to determine which transactions are business transactions when you have a bank account dedicated specifically to your LLC, then you know for sure that all of the transactions on this account are business transactions. You may think that you\u2019ll be able to tell which are business transactions and which are personal transactions but believe me, it\u2019s a lot harder to remember the personal transactions from the business ones months later when tax season comes around. So for LLCs, having a dedicated bank account for business transactions is important for tax purposes because it will make filing taxes a lot easier. <\/p>\n\n\n\n
The second reason to get a business bank account for your LLC is if you use your personal account for business transactions, you open yourself up to lawsuits and your personal assets won\u2019t be protected even though you formed an LLC to get asset protection. Of course, if you do business transactions for your LLC through your personal bank account, creditors of your LLC can claim funds in your personal bank account as financial recourse. <\/p>\n\n\n\n
So if you want to keep your personal assets safe and make tax season a breeze, just use a separate bank account for your LLC and your personal finances. <\/p>\n\n\n\n
To open a bank account for your LLC you\u2019ll need what is known as a \u201cbank kit.\u201d This includes documents like your Articles of Organization, Certificate of Good Standing, Certificate of Publication, and your EIN. Basically, you\u2019ll need most of the documents you\u2019ve been filing to form and establish your LLC. <\/p>\n\n\n\n
Many LLC formation services include bank kit preparation among their services. <\/p>\n\n\n\n