<\/span><\/h3>\n\n\n\nThe final stage in establishing the proper business foundations for your LLC is to open a separate business bank account for your new LLC.<\/p>\n\n\n\n
While many business owners forget this stage, it\u2019s essential to your LLC's success.<\/p>\n\n\n\n
Frequently, business owners use their personal bank account to conduct business and personal transactions under the assumption that having a single account for both purposes is convenient or time-saving. However, you should avoid this method for two compelling reasons.<\/p>\n\n\n\n
The first reason is that while you may believe you are capable of later separating personal and business transactions for tax purposes, you aren\u2019t. While it's easy to distinguish between two transactions made within a few days of one another, it's nearly impossible to determine whether a transaction was made for personal or business purposes when poring over a statement containing hundreds of transactions made as long ago as 11 or 12 months. This significantly complicates filing state and federal income taxes both for your business and yourself.<\/p>\n\n\n\n
The second reason is that if you use your personal account to manage business finances for your LLC, you void the personal liability protection you have when you form an LLC. Additionally, your personal data, identity, and funds in your personal bank account are all at risk.<\/p>\n\n\n\n
In summary, if you want to safeguard your personal finances and identity while also saving yourself a headache come tax season, simply open a business bank account for your LLC.<\/p>\n\n\n\n
To open a business bank account, you will need what is referred to as a “bank kit.” This bundle contains a variety of formation paperwork, including your EIN, formation documents, initial resolution, and Operating Agreement.<\/p>\n\n\n\n
Of course, you can create your own kit. And, as with the other steps, a formation service will create it for you, saving you time and effort.<\/p>\n\n\n\n