Are you Commingling Your Funds?

This One Mistake Could Cost You Your LLC Protection

Amanda Beale
June 28, 2025

Hey ,

Most business owners don’t think about what happens if they get sued or how they could still be held personally liable even with an LLC in place.

That’s where separating your business and personal finances comes in.

And not doing it properly could result in piercing the corporate veil… a legal concept that puts your personal assets on the line.

Yes! This can happen…

⚠️ What’s Non-Compliant

If you’re running your business through an LLC or corporation, one of your key protections is limited liability — the idea that your personal assets are off-limits in a business dispute.

But that protection disappears when courts find that you’ve commingled your funds — meaning you’ve used your business account like a personal piggy bank (or vice versa).

Too many business owners unknowingly put themselves at risk by:

→ Using one bank account for both personal and business expenses.
→ Paying for groceries, gas, or vacations from their business card.
→ Taking client payments into a personal Cash App, Venmo, or Zelle.
→ Skipping proper bookkeeping and documentation.

If this sounds familiar, you could be seen as operating a “sham” business and that’s grounds for piercing the corporate veil.

✅ Compliance Tip

Separate your money, protect your entity.

Open a dedicated business bank account and only run business transactions through it. This single move helps preserve your liability protection and makes your financial life easier at tax time.

Even if you're a sole proprietor, separating your accounts shows that you treat your business like a real business — and that matters in court, with the IRS, and for long-term growth.

🛠️ Action Steps: Fix It Now

✅ If you already have an LLC or corporation, check that you have a business bank account in the business name, not just your own name.

✅ If you’re still running your business from your personal account, open a business account ASAP… even if you're just getting started.

✅ Stop mixing expenses. Create a simple rule: If it’s not for the business, it doesn’t hit the biz card.

✅ Start using an accounting tool or even a spreadsheet to track income and expenses clearly.

📢

I’m not affiliated with any bank… but I am a former banker, and I’ve seen way too many entrepreneurs lose everything over something as simple as a bank account.

Make the small switch now before it becomes a big mess later.

Have questions or want a second opinion on your setup? I'm happy to point you in the right direction… just hit reply.

📌 Disclaimer

The information provided in this newsletter is for general informational purposes only and does not constitute legal, tax, or financial advice. While every effort is made to ensure accuracy, laws and regulations change, and individual circumstances vary. For advice specific to your business, please consult a qualified professional.

When in doubt, consult a licensed attorney to review your compliance needs.
If you don’t have one, I’m happy to help you get connected, just schedule a quick call.

Thank you for reading.

Keep showing up, protect the business that you are building and share what you learned with a friend !

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Until next time💛