What happens next after you form a new LLC? How can you make sure the company runs smoothly?
These are my basic do’s and don’ts for LLC banking. To learn more, contact me!
- Deposit all income payments to the LLC bank account, not a personal account.
- Pay company bills out of the LLC bank account or on the LLC credit card, not your personal card.
- Keep a checkbook or other accounting record of all banking transactions for the LLC for each year.
- Keep these business records for at least three years:
- Bank deposit slips
- Business credit card statements
- Canceled checks
- Paid bills
- File the annual LLC statement with the Secretary of State to keep the LLC active and in good standing.
- Commingle funds between personal and LLC business, especially if you have multiple LLCs. Commingling is using one bank account for the activities of multiple businesses, or using one bank account for both personal and business activities.
- Transfer funds directly from one LLC to another (if you have multiple LLCs). Instead, withdraw the funds personally from one, and then deposit them personally to the other. Make a note for your accountant at the end of the year.
- If you make a mistake on a deposit or withdrawal and the money goes to the wrong account, don’t panic, but do note it for your CPA to correct in your books at year-end, before filing your taxes.
- Transfer all funds out of a LLC and distribute them to yourself personally, if money is still needed in order to run the operations of the LLC. This is called an under-capitalization of the company and can expose you as owner to personal liability.
Contact me today for a list of LLC Do’s and Don’ts tailored to your unique situation.
Amy Roepke ~ The Lawyer for Employers