As discussed above, when you commingle, your corporate veil can be pierced.
It is very important to keep your corporate veil intact. Withdrawing money from your business account to pay personal expenses without documentation.Depositing business checks into your personal bank account.Having only one bank account for personal and business needs.Writing business checks for personal reasons/expenses, and vise versa.Transferring money between business and personal accounts without documentation.Some of the most common ways to commingle are: When you commingle your funds, you are treating your business funds as your personal money, whether buying or selling. How do you “commingle,” and what is “commingling?” Today on Tulsa Estate Planning Blog, let’s discuss the legal reasons to not commingle your business and personal funds and the ways to avoid commingling. This the the main reason to avoid commingling your funds, although there are also tax reasons. When you commingle your business and personal funds, creditors can “pierce the corporate veil,” and get into your personal assets through liability through your business.
In law, there is a business concept called “corporate veil,” meaning the liability shield between the business owner and the business. However, this is a very important step to keep the limited liability of your company in tact. or Corporation, the last thing most people want to deal with is administrative problems and difficulties like separating bank accounts and assets. If you have paid the money to an attorney or to the government to set up a business entity, whether a L.L.C. This is a bad idea, both legally and logistically.
However, there are many small business owners that do not. Most business owners know to keep their business assets separate from their personal assets.