<\/span><\/h3>\n\n\n\nThe last step to ensuring your LLC has the proper business foundations is to open a dedicated business bank account for your new LLC. <\/p>\n\n\n\n
Many business owners overlook this step, but it\u2019s critical to the success of your LLC. <\/p>\n\n\n\n
Oftentimes business owners use their personal bank account for both business and personal financial transactions, mistakenly believing that using one account for two purposes is somehow convenient or time saving. But there are two very good reasons I advise against this practice. <\/p>\n\n\n\n
The first reason is that while you may assume that you\u2019ll be able to determine the difference between personal and business transactions later on for tax purposes, you simply won\u2019t. Sure, it\u2019s easy to notice the difference between a couple of transactions within a few days after they were made, but it\u2019s nearly impossible to determine whether a transaction was for personal or business reasons when you\u2019re looking through a statement containing hundreds of transactions that were made as long as 11 or 12 months ago. <\/p>\n\n\n\n
The second reason is if you use your personal account for business finances associated with your LLC, you negate the personal liability protection you receive when you start an LLC. Furthermore, your personal information, your identity and the funds in your personal bank account are all compromised. <\/p>\n\n\n\n
In short, if you want to protect your personal finances as well as your identity and want to make tax season go more smoothly, simply open a business bank account for your LLC. <\/p>\n\n\n\n
You need what is known as a \u201cbank kit\u201d to open a business bank account. This kit includes many formation documents, such as your EIN, Articles of Organization, initial resolution, and Operating Agreement. <\/p>\n\n\n\n
Of course you can create the kit yourself. And as with every step of the formation process, a formation service will create it for you, which saves you time and effort. <\/p>\n\n\n\n