On today's show, I am going to talk about two area that I receive a lot of questions about. What type of legal entity should I choose for my business and should I open up a separate bank account for my business Let’s start with the first question regarding legal entities.
Let me first say that there is no right or wrong choice when it comes to picking a legal structure for your business. It all depends on your long and short-term goals, as well as how you want to run your business. It is okay to start out with one particular entity type and switch later on.
As for whether you should maintain a separate bank account for your business, the answer is yes. Some businesses legally have to separate business and personal funds. If your company is a separate legal entity, business funds must be in a separate bank account.
Even if you are not required to use a business bank account, you may want to consider maintaining a separate business account because it can get quite confusing using one bank account for both personal and business.