Q: Should I electronically link my business checking and personal accounts at my local bank?
I own real estate and have a dedicated LLC business checking account at my local bank for it. This account is separated and there is *no* link to my personal account at the same bank. However, the no link is getting to be a hassle for transferring money because I must write a check to myself every time. The transactions/accounting for both are definitely kept separate.
Thinking in terms of liability and litigation, should I go ahead and have my bank electronically link these two accounts? I mean there are all kinds of tenants these days and some are more worrisome than others. I consider myself to be a good landlord though and would never give tenants any reason to pursue litigation.
Thank you very much in advance for your advice!
A:
When managing both personal and business finances under the same bank, the convenience of linking accounts can be appealing. However, it's important to weigh this convenience against potential risks, especially concerning liability and litigation. Keeping your business and personal accounts separate not only helps with clear financial management but also provides a layer of protection against personal liability for business debts or legal actions.
Linking your business checking and personal accounts electronically could potentially blur the lines of separation between your personal and business assets. In the event of a lawsuit or debt collection against the business, having distinctly separate accounts can be a crucial factor in protecting personal assets. Courts often look for a clear demarcation between personal and business finances when determining liability issues.
Before making a decision, it might be beneficial to discuss your specific situation with a professional advisor familiar with business law and finances. They can provide personalized advice on how to maintain the necessary separation between accounts while still managing the practical aspects of transferring funds. Solutions such as online banking features specifically designed for business owners might offer the convenience you're looking for without compromising the legal separation between your personal and business finances.
1 user found this answer helpful
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
