Christopher S. Mulvaney,

Attorney and Counselor-at-Law

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THIS WEBSITE INCLUDES GENERAL INFORMATION & THE OPINIONS OF CHRISTOPHER S. MULVANEY. IT IS INTENDED TO STIMULATE A BASIS FOR QUESTIONS RELATED TO YOUR PARTICULAR FACTUAL CIRCUMSTANCES — BEFORE YOU ACT.  THIS WEBSITE DOES NOT CONSTITUTE LEGAL ADVICE. IF YOU WANT LEGAL ADVICE, PLEASE MAKE A ZOOM APPOINTMENT TO SPEAK WITH ME.

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Gonzaga University School of Law – Spokane, Washington – Class of 2002 – Cum Laude The Latin phrase “Deo patriae, scientiis, artibus” translates to “For God and country through sciences and arts”.  The initials A.M.D.G. on the seal of Gonzaga Law School stand for Ad Majorem Dei Gloriam, which is Latin for “For the Greater Glory of God” the Motto of the Society of Jesus (Jesuits): a Catholic religious order founded by St. Ignatius of Loyola.

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WHY IS IT IMPORTANT TO OPEN AN LLC CHECKING ACCOUNT?

Opening a separate business checking account for your LLC is a critical step for maintaining the integrity of your business and securing its financial health

Get an Employer Identification Number (EIN) from the IRS website before you open the LLC Checking Account. It is not required, but it is helpful to maintain separateness from yourself. The number is called an EIN regardless of whether you have any employees.

BECU is a good place to open your business checking account.

Here’s why it’s so important:

1. Protection of Limited Liability:

• An LLC provides limited liability protection, separating your personal assets from business liabilities.
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• However, mixing personal and business funds (commingling) can jeopardize this protection and potentially expose your personal assets to business debts and lawsuits.
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• A dedicated business bank account helps maintain the clear legal separation between your personal and business finances, preserving your liability shield. 

2. Simplified Accounting and Tax Preparation:

• A separate business checking account makes it easier to track income, expenses, and deductions, leading to more accurate bookkeeping and tax filings.
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• This also simplifies the process for your accountant during tax season, potentially saving you time and money.
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• Accurate record-keeping and clear financial statements are essential for tax compliance and can be invaluable in case of an IRS audit. 

3. Enhanced Business Credibility and Professionalism:

• Having a dedicated business account helps project a professional image to clients, suppliers, and business partners.
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• It demonstrates that your business is a legitimate entity, fostering trust and increasing your credibility. 

4. Access to Business Banking Services:

• Opening a business account grants you access to specialized banking services tailored to business needs, such as:
• • Merchant services for processing credit and debit card payments.
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  • Business credit cards for building business credit and managing expenses.
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  • Potential eligibility for business loans and lines of credit. 

5. Streamlined Financial Management:

• A dedicated account allows for better management of cash flow, easier tracking of income and expenses, and efficient handling of day-to-day transactions like paying bills and receiving payments.
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• Some business bank accounts offer online banking platforms and integration with accounting software, further streamlining financial operations. 

6. Avoidance of Commingling Issues:

• Using a personal account for business transactions, even for single-member LLCs, can lead to commingling issues that blur the lines between personal and business finances.
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• This can result in accounting difficulties, potential loss of deductions, and loss of the limited liability shield. 

In short, opening a business checking account for your LLC is a fundamental step in maintaining the separate legal identity of your business, ensuring financial clarity, and accessing specialized services that support your business growth and success.

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Washington State residents can meet with me in Zoom/DocuSign from anywhere in the world, and I can notarize their electronic signatures because I am a remote online notary.  Just email me an image of your photo ID.