First off, it may be difficult to distinguish between personal and company spending when using a personal checking account for commercial activities. This may lead to misunderstanding, making it challenging to track and manage your business spending, and eventually result in serious financial issues. Having all of your business transactions in one location can also make it challenging to furnish the IRS with correct records in the event of an audit.
Second, it can be against the terms and conditions of your bank account to use a personal checking account for business activities. To prevent money from being mixed up, most banks demand that business owners open a separate business account. Your bank may close your account if you break the terms and conditions of your account, which could be quite problematic for your company.
Thirdly, it may be detrimental to your company’s credibility and professionalism to conduct business using a personal checking account. Customers, suppliers, and creditors anticipate firms to maintain a separate business account; failing to do so could give your company a less trustworthy appearance.
Is It Legal for My LLC To Own Another LLC? An LLC may indeed own another LLC. A parent-subsidiary connection exists in this situation. Operations and management of the subsidiary are under the management of the parent firm, or the LLC that owns the subsidiary.
It’s not advised, but it is conceivable for two businesses to use the same DBA, or “doing business as” name. Utilizing the same DBA name raises concerns about trademark infringement and can cause confusion. To be clear of any legal concerns, it’s advisable to select a distinctive DBA name. Can My DBA Be Trademarked?
If your DBA name satisfies the requirements of the United States Patent and Trademark Office (USPTO), then you may trademark it. A DBA name must be original and unregistered with another company in order to be trademarked. It’s advisable to speak with a trademark lawyer to be sure your DBA name complies with USPTO regulations.
You need to submit a “Doing Business As” form to your state or local government in order to add a DBA to a sole proprietorship. Using this form enables you to legally operate your business under a name different than your given name. You can start using your DBA name for any business dealings after the paperwork has been submitted and authorized. It’s crucial to understand that a DBA does not establish a different legal entity; you will continue to be held personally accountable for all business debts and responsibilities.
In conclusion, using a standard checking account for commercial activities is not advised, even though it is technically viable. To avoid any confusion, legal complications, or financial troubles, it is essential to open a separate company account. Additionally, if you intend to utilize a DBA name for your company, you must make sure that it is original and not in use by another company. You can make sure that your company runs efficiently and properly by adhering to these rules.