I know that you are supposed to have a second checking account for your business. I'm starting an S-corp in the next month or so and am looking at checking accounts. Do I have to open a business checking account, or can I simply open a separate personal account to hold business funds?.
Right now, I simply have my money sent to PayPal and then transfer my money to a personal account. That sufficiently keeps business and personal income separate, but I'm wondering if I need to go farther to keep business and personal income separate as a corporation.
Thanks for any advice!
For a corporation, you have to have a business account. The account has to be opened in the business name, and has to include important people like CEO, treasurer, usually chairman of the board, and anyone else who would need access to the money.
Also, before you try to open one, you have to be registered with your state and the IRS before you can open a business account for a corporation. The bank will require a copy of your by-laws, or at least they do for NPO's, but I really don't see it being any different for any other corporation.
Not separating the funds is a big no-no, the kind you go to prison for.
Actually, let me rephrase that....
What if I started a LLC taxed like a s-corp and I'm the owner/sole shareholder?
That's actually not true at all. If you a sole proprietor, you can either be a sole proprietor or you can elect to form a single member LLC.
From there, you can then elect corporate tax treatment or to become a disregarded entity.
Ok, guess I was wrong about that part. It's just NPO's that must have multiple board members. Everything else still applies, however. Even with just yourself, money has to go into a bank account in the corporate name, then the corporation "pays" you.
Actually, looking at it, it doesn't look like you need by-laws either. Just the articles of incorporation that you file with your state.
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