How Does an LLC Receive Checks?

By Brette Sember, J.D.

How Does an LLC Receive Checks?

By Brette Sember, J.D.

A limited liability company (LLC) must set up a business bank account in order to deposit checks made out to the business. Your business account is an important part of your LLC operations, so be sure to learn how to use and maintain it properly.

Two businesspeople looking at documents

Business Bank Accounts

For your LLC to be able to accept checks, you need to open a business account with a bank. Although a business account generally has more fees than a personal account, it often offers services you may need, such as payroll or tracking of expenses. To set up a business account for an LLC, you usually need the following documents:

  • A copy of your articles of organization
  • A certificate from the state agency that registers LLCs stating that your LLC is in good standing
  • A copy of your operating agreement

The bank will also ask any LLC managers or members authorized to deposit checks on the LLC's behalf to sign an agreement with the bank.

Importance of Business Accounts

If you are running a small business, it can be tempting to just use your personal bank account. However, doing so is a bad idea. If you do not set up a separate bank account for the LLC, you do not clearly establish the "corporate veil," which can open you to personal liability for the business. It may also be a crime in your state to deposit a check made out to your LLC into your personal account. To properly protect yourself, keep your personal and business funds separate.

How to Deposit a Check

When your LLC receives a check, take these steps to deposit it:

  • Write the name of the LLC in the endorsement area
  • Whoever is depositing the check should sign their name and include their title underneath this area
  • Complete a deposit slip and deposit the check in person or online

How to Write a Check to an LLC

To write a check to an LLC, the person writing the check should fill in the date and amount and sign the check as you would any other check. In the "pay to the order of" line, write the name of the LLC.

What to Do If a Check Is Written Incorrectly

People can make mistakes when they write checks to your LLC. For example, they might make out the check to you personally instead of to the LLC. In such a case, the simple solution is to endorse the check over to the LLC by writing "Pay to the order of [name of LLC]" and signing your name on the back of the check. Then endorse the check as you normally would to deposit it in your LLC account.

In situations where the name of your LLC is written incorrectly or misspelled, check with your bank to see if they can deposit it as is. If not, you will have to send the check back and ask for a corrected version.

Your bank account is an important tool in the running of your LLC. Shop around for a good rate and features that meet your company's needs. Keep careful records as you deposit or write checks in the account. If you need help setting up your LLC, consider using an online service provider.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.