By Maryann Lawrence, Startup Rep, Direct Incorporation
So, you’ve recently incorporated your business. First off, congratulations! Now, it’s time to get down to the business of separating your personal bank account from your corporate bank account. Here are some reasons you’ll want to do so right away.
- Liability. Failing to separate your business and personal accounts may result in you being personally responsible for corporate debt and liabilities. For this reason alone, it is imperative you keep separate banking accounts.
- Taxes. Your business income and expenses and your household income and expenses should be completely separated out for tax purposes. Along these lines, it’s a necessity to create two checking accounts, and pay your bills from the appropriate account so that you maintain proper tax records. This in turn will save you time, headache and unwanted calls from the IRS.
- Insight. When business and personal accounts are co-mingled, it’s almost impossible to maintain proper records. By separating your business account from your personal account, you will get a clearer picture of your personal and business financial health.
- Image. Writing checks from a business account helps deliver a clear message to your customers and suppliers that you are a professional and credible business.
Do you have questions about what to do after incorporating your business? Please leave a comment below and I will try to answer them. Thanks! – Maryann
