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Keeping your personal and business finances separated can help you protect your personal assets if something were to happen to your business. In order to accomplish this, many small businesses elect to become a Limited Liability Company (LLC) or a Corporation. Doing so helps protect any personal property from lawsuits and creditors and, in certain circumstances, possibly even reduce your business’s taxes.[i]
To transition your business to an LLC, you will first want to make sure that there are no ties between your personal bank accounts and your current business revenue. You will want to open a business checking account to handle all of your company-related expenses and income.
Keeping your business and personal assets separate will also protect both your personal and your business credit score. By keeping all of your finances under your business name, you will be better able to increase your company’s credit score.
When a customer receives a bill from your business name (versus your personal name), it helps to develop the integrity and strength of your brand. Imagine seeing a charge on your account from John Smith, rather than Smith Communications. Avoid customer confusion and the chance of a client flagging your charge as fraudulent by keeping all billing and payment within your company name.
While you may not legally need a separate business bank account as a sole proprietor, it is smart to have separate accounts as your business grows. Don’t put off opening an account until your business is successful. Prepare for the future financial growth of your business today by setting up a basic business checking account and business money market account with axos bank today.
Novo is the mobile banking platform for modern businesses. You can apply for an account online in minutes, giving you more time to focus on running your business. We provide all the banking tools you’ll need to link to your existing accounts, pay your bills, process ACH transfers, and deposit checks all within the Novo app. With your account, you will receive a Novo Mastercard Business Debit Card to use around the world and at any ATM without any fees from us.
Novo accounts do not have a minimum or maximum deposit amount. If you plan on depositing a large amount of money, let us know 2 – 3 days in advance in the ‘Support’ tab within the Novo app, so it is not flagged for fraudulent activity.