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What are the pros and cons of having a business savings (LLC) versus a personal savings?

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Chalmers Brown

Techstars-backed Founder & Engineer

If you have a business you should really have a business savings account. Although they may offer very similar features, it is better for your own internal accounting to separate the 2. Also if you have a business savings then the name on the account is your businesses name, which is definitely a better route if people are paying your business.

Specifically in terms of pros/cons of actual features, at a high level they are more or less the same.

Answered almost 8 years ago

Manny Alvarez

Legal & Biz Advisor to Entrepreneurs & Startups

The biggest pro in separating personal from business savings is establishing clear evidence of separateness, which is an important presumption with LLCs or other types of business entities. As a refresher, one big reason entrepreneurs form LLCs is to limit their liability to their business investment. If you have an LLC but don't open a separate business account for that entity, then it's really hard to say with a straight face that you're operating as a separate business entity.

By contrast, there really aren't many cons to establishing a separate business account. I suppose you could consider "hassle" a con, but that's likely greatly outweighed by the benefits.

Answered over 7 years ago