After official formation, an LLC needs to establish a bank account so that it can operate as an income-generating business. After establishing an LLC bank account, checks written to the LLC can be deposited in the LLC's bank account similarly to how an individual would deposit a check written out to him.
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LLC Bank Accounts
To open an LLC checking account, most banks require an LLC to present a copy of its articles of organization, a certificate of good standing issued by the state agency responsible for registering business organizations and a copy of the LLC's operating agreement. Additionally, any members or managers authorized to deposit checks written out to the LLC must provide their name and address, and sign an agreement with the bank.
Writing a Check to an LLC
If someone wants to write a check to the LLC, he simply needs to put the name of the LLC in the recipient field of the check. Any LLC member or manager who has signed with the bank may deposit the check in the LLC's checking account. Depending on the bank, this individual may need to sign her name on the back of the check.
LLC Accounts vs. Personal Accounts
A checking account in the name of an LLC is fairly similar to a checking account for an individual. Banks may be willing to offer a more generous interest rate to businesses that open a checking account for an LLC. Additionally, banks may offer features in a business checking account not present in a bank account for an individual, including payroll and expense tracking. However, business accounts generally carry a moderate monthly charge, while checking accounts for individuals are generally inexpensive or free.
There may be serious consequences for LLC members if the LLC does not have its own bank account. Not maintaining a bank account for the LLC is a sign of not complying with the formalities of an LLC, and a creditor of the LLC may be able to pierce the corporate veil and hold the LLC members personally responsible for any LLC debts. Additionally, an LLC member that deposits a check written out to the LLC in his personal checking account may be guilty of conversion, which is a crime in all states, and may be held civilly responsible and be forced to pay financial damages to the LLC.