<\/span><\/h3>\n\n\n\nThe last step in establishing the proper business foundations for your LLC is to open a business bank account to manage your business money.<\/p>\n\n\n\n
This critical step is often skipped by LLC owners, but it is well worth the effort.<\/p>\n\n\n\n
Many company owners utilize their personal bank accounts for both business and personal spending and then attempt to ascertain whether a previous transaction was done for business reasons for tax purposes. There are two compelling reasons to refrain from doing so.<\/p>\n\n\n\n
The first reason is that, although you may believe you\u2019ll be able to distinguish between commercial and personal transactions later, it\u2019s difficult to do so many months after the transactions were done, particularly when attempting to distinguish between several hundred transactions. As a result, creating a business bank account just for business transactions alleviates most of the stress associated with filing your personal tax returns.<\/p>\n\n\n\n
The second reason you should avoid using your personal bank account for company spending when forming an LLC is that you risk jeopardizing your personal information, identity, and personal finances. Using your personal bank account for company activities defeats the purpose of forming a South Dakota LLC, which provides limited liability and personal asset protection.<\/p>\n\n\n\n
So to make filing state and federal income taxes less stressful, and to safeguard your privacy and personal assets, register a corporate bank account.<\/p>\n\n\n\n
To establish a bank account for your LLC, you'll need a “bank kit.” This bundle contains a variety of paperwork and many certified copies of your LLC\u2019s formation documents, including your EIN, an Operating Agreement, and Articles of Organization. You may compile these papers and get certified copies on your own, or you can pay an LLC formation provider to produce a bank kit for you.<\/p>\n\n\n\n