So I filed the articles for my LLC back in January, got the EIN, and then... did nothing. I've been running everything through my personal checking account. It's a single-member LLC, no employees. Am I asking for trouble? I keep seeing people say you absolutely need a separate account or you'll lose your liability protection. But others say it's fine for a one-person show. What's the real deal here?
LLC Banking
I formed a Kentucky LLC but haven't opened a separate business bank account
Real deal: it's not a legal requirement by statute, but if you ever get sued, commingling funds is the number one way to lose your liability shield. The judge will say you treated the LLC as your personal piggy bank. Open a business account. It's not hard.
I've been commingling for 3 years and nothing happened. YMMV
That's like saying you drove without a seatbelt for 3 years and nothing happened. Doesn't mean it's a good idea.
What's stopping you from opening one? Most banks have free business checking for small LLCs. I use a local credit union, zero fees.
Honestly? Just laziness and the fear of paperwork. But the responses here are making me think I should just do it. Any recommendations for banks that don't require a million documents?
Bring your articles of organization, EIN letter, and ID. That's usually it. Some online banks are even easier.
Wait, do you even need an EIN for a single-member LLC with no employees? I thought you could just use your SSN. Not saying you should, but...
You don't strictly need an EIN for a disregarded entity, but it's smart to have one so you don't hand out your SSN. Also, many banks require it for business accounts.
I never got an EIN and just used my SSN. Bank didn't care. But they did ask why I didn't have one. It was fine.
Banks vary. But seriously, just get the EIN. It's free and takes 5 minutes online.
I already have the EIN. So that's not the hurdle. It's more about which bank. I've heard hor ror stories about big banks freezing accounts.
Freezing accounts? That's usually when there's suspicious activity. If you're just running a normal small business, you'll be fine. But yeah, credit unions are less annoying.
Also, don't forget to get a business credit card. Keeps things separate and you can earn points. But that's step 2.
Lol at 'step 2'. I'm still on step 1 after 3 years.
Alright, I'm convinced. Going to open one this week. Thanks for the kick in the pants.
Good call. Also, keep your personaal and business expenses separate from day one. Don't pay for groceries with the business card. Obvious, but people do it.