Tuesday, August 12, 2008

Get a Business Bank Account

This article makes no promise to help because it is not professional advice.

LLCs and corporations (and other entities, possibly) protect their owners from personal liability - theoretically. In order to keep it that way in the eyes of the law, business owners have to separate business stuff from personal stuff. One way to do that is to keep the business funds in a business bank account, your personal funds in a personal bank account, and establishing a paper trail when those worlds interact. Opening a business bank account requires at least four things:

1. Proof that your business exists. An LLC has its Articles of Organization and its FBN statement(s) to establish its existence and its trade names.

2. Proof that you exist. A photo ID, like a driver's license, is a no-brainer. Some banks require two or more forms of ID, however. Unlike the USPS for P.O. Boxes, many financial institutions will accept a credit card as valid form of ID.

3. Proof that you run the aforementioned business. In an LLC, the Articles of Organization and/or the Operating Agreement probably mention who's in charge - you and other people? (For a corporation, those documents are the Articles of Incorporation and the Bylaws.) The Operating Agreement is usually signed by all members and all managers. To drive the point home, the minutes of the first meeting probably mention that the Articles and Operating Agreement have been ratified. Therefore, you (who exists) run the aforementioned business entity (which exists) and are able to open a business bank account.

4. Money to put in the bank. Otherwise, there's no point in opening a bank account, is there now?

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