Starting a business? Open a separate bank account

Know Yo Business

By Yolanda Johnson
Posted 9/20/19

Starting a business is so exhilarating! Entrepreneurs get caught up in the excitement of owning their own business and doing what they love but many do not take care of the details of business. …

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Starting a business? Open a separate bank account

Know Yo Business

Posted

Starting a business is so exhilarating! Entrepreneurs get caught up in the excitement of owning their own business and doing what they love but many do not take care of the details of business.

Most need assistance on the business side of things because starting a business is not an instinct. The Alabama SBDC is available at no charge to assist those wanting to start a business. It is easy as name, address and email at www.asbdc.org/register .

When listing the steps to starting a business opening a separate business bank account is not a legal requirement. This is a critical step that should not be skipped. There are several reasons for opening a business bank account which will get the business off on the right foot and provide a foundation for sustainability.

A business account provides the business a professional appearance for customers, suppliers and finance organizations. It also makes it easier for credit card organizations and banks to keep personal finances separate from business since most of the time it is the same organization. Co-mingling funds of personal and business finances causes the corporate veil to be broken causing complications and indicates the business and its owner are the same.

Being one, there are no liability limitations in place protecting personal assets from business creditors.

Also, with one account if either the business or personal finances are audited both are audited according to standard business practices. A separate account makes it easier to establish business credit and for underwriters to understand business’ financials.

Even one of these reasons would be enough to establish a separate bank account, be prudent for the business but it is not legally required. IRS taxes on the other hand are required and there are several to keep up with year-round.

As a business owner do you have the IRS Business Taxes due dates on your calendar? If not, how do you keep up with them? The IRS will send you an email reminder which is a service provided within their small business self-employed center. Consider downloading the Tax Calendar or receiving these emails by going to this website, https://www.irs.gov/businesses/small-businesses-self-employed/irs-tax-calendar-for-businesses-and-self-employed Let’s keep the entrepreneurial excitement going by implementing sound business practices.