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Do I need a separate business bank account when just starting out?

Can I use my regular personal bank account for business and just keep clear records of all my business expenses or do I need to set up a separate business bank account?

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Mike Sutton and Jeff Shick have both hit the nail on the head already. Your business has to be as separate from your personal as possible. Not sure of what entity type you are using (LLC, sole-proprietor, corporate) but in each there are usually legal issues with "commingling of funds". Some business entities actually lose their "liability shield" when there is commingling of funds present. Better to not lend an attorney a helping hand in going after your personal assets because you didn't open a separate bank account.

Good luck and let us know if we can help further.


If you are a sole proprietorship you technically could but it would not be a good idea. My original business was a S/P, I had no employees and did little purchasing so I used a personal account until I hired my first employee. It didn't seem professional to write paychecks from a personal account.

Now if you are an LLC, S, Corp C Corp or anything like that you could but really, really don't want to. Should you ever get sued you would lose all protection and even if you did it for a short while it could come back and bite you.

It isn't like a business checking account is expensive. It is far more professional as well as being safer from a liability point of view. The other thing that is important is your books will be a lot cleaner and easier to understand.


It's always best to start with good habits so you don't have to try to "fix" things later.


From accounting, legal and business perspectives yes always keep business money and personal money separate


Absolutely not. You must open a business account both for security and tax purposes.


An account in business name depicts your seriousness in business.


Yes, this is a very good practice to establish. It is also very beneficial to research different banks and their product offering. Depending on your business needs and the type of business you open will determine the best banking partnership, either with local, national or global banks.

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