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?
I am Eyal Nachum, being a director at Moneta International Bank UAB, I would suggest you open a new bank account for business. Most notably, co-mingling personal and business funds are frequent among part-time business owners like multi-level marketers, realtors, consultants, etc. Personal and Business bank account must be different as the money that comes into a business must be used for business projects and growth, keep the money for paying supplies, business rents or utilities, payroll, and anything connected to the work. That money should not be used for paying mortgages, groceries, personal vacations, etc. which has no significance with the business.
The reason people form a business is to shift liability off you personally.
If you are forming a corporation to limit your liability, then you should open a business bank account. If you do not, you are co-mingling funds, and this will allow for the corporate veil to be punctured much easier and shift the liability back to you personally.
So in short, yes, open a business bank account when you start your business.
Separate bank account for sure, at the end it will save you money, nerves, and time :)
If the money will come from your SP or LLP, there will be questions. And it's not a good idea, it's better to make it official. Choose a bank where there are good conditions for corporate clients and open an account.
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.
An account in business name depicts your seriousness in business.
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.
Absolutely not. You must open a business account both for security and tax purposes.
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.
From accounting, legal and business perspectives yes always keep business money and personal money separate