For the small business owner, there’s typically little separation between business and personal. You bring your work home (or you may even work from home). You’ve probably invested your own money in the business, or skipped a pay check or two to keep the business going.
However, too many small business owners make the mistake of using a personal bank account for their business. While it may seem like a silly formality to open a business account, using your personal account can affect your legal liability. If you’re still using your personal bank account for your business, here’s what you need to know:
Forming an LLC or corporation is a critical step to protect your personal assets from any liability of the company. The courts consider the business (Corporation or LLC) a separate entity from the business owners; if your corporation gets sued, you can’t be sued personally (unless you’ve personally guaranteed anything).