NJ: Can a third party open a business checking account for me? Also converting LLC?

[CompelNJ]

What is the name of your state (only U.S. law)? New Jersey

Last month I stated a new business as a Single Member LLC. I have my EIN and registered with New Jersey. Due to my personal financial situation I have been unable to open a business checking account. I know I need to keep my business money separate from my personal funds. My business does not have any employees. My wife is willing to open the business account for me but I don't know if she can do that legally?

If she can not open the account then I assume if I convert the LLC from a Single Member to a Multi-Member LLC she can become part of the LLC and then will legally be able to open an account for the business but I don't know how to do this.

 

[LdiJ]

What is the name of your state (only U.S. law)? New Jersey

Last month I stated a new business as a Single Member LLC. I have my EIN and registered with New Jersey. Due to my personal financial situation I have been unable to open a business checking account. I know I need to keep my business money separate from my personal funds. My business does not have any employees. My wife is willing to open the business account for me but I don't know if she can do that legally?

If she can not open the account then I assume if I convert the LLC from a Single Member to a Multi-Member LLC she can become part of the LLC and then will legally be able to open an account for the business but I don't know how to do this.

It is not absolutely necessary to have a separate business account when you are a single member LLC. You just need to keep very excellent accounting records.

 

[CompelNJ]

I was under the impression that if I co-mingled my funds then the corporate veil could be pierced. Also if my personal account was frozen due to debts it would prevent me from payng my business expenses. I do not want that to be a concern. Which is the two reasons I want a separate account.

 

[LdiJ]

I was under the impression that if I co-mingled my funds then the corporate veil could be pierced. Also if my personal account was frozen due to debts it would prevent me from payng my business expenses. I do not want that to be a concern. Which is the two reasons I want a separate account.

With a single member LLC the corporate veil is virtually non-existent. It can be easily pierced anyway. Yes, if your personal account got frozen it would impact your business if you only had one account, but is that a real concern?

If you decide to add your wife to your LLC so that she can open the account, then you will also have to decide if you are going to treat yourselves as a partnership (default) or make an S-Corp election. Of course, that means that she will be the signatory on the account and that could get complicated for you.

 

[CompelNJ]

With a single member LLC the corporate veil is virtually non-existent. It can be easily pierced anyway. Yes, if your personal account got frozen it would impact your business if you only had one account, but is that a real concern?

It is a real concern because I am behind on my credit card bills. I am enrolled in a debt negotiation/settlement plan through a law firm but the possibility exists that I will be brought to court for some of my personal credit card accounts (pre-marriage).

If you decide to add your wife to your LLC so that she can open the account, then you will also have to decide if you are going to treat yourselves as a partnership (default) or make an S-Corp election. Of course, that means that she will be the signatory on the account and that could get complicated for you.

I know I need to do research on the difference between a partnership and an S-Corp for taxation purposes. I do not have any concern about having my wife have signature authoputy on the account. Honestly she is much better with money than I am.

 

[LdiJ]

It is a real concern because I am behind on my credit card bills. I am enrolled in a debt negotiation/settlement plan through a law firm but the possibility exists that I will be brought to court for some of my personal credit card accounts (pre-marriage).



I know I need to do research on the difference between a partnership and an S-Corp for taxation purposes. I do not have any concern about having my wife have signature authoputy on the account. Honestly she is much better with money than I am.

I can understand why you would feel comfortable with that, but the problem you will encounter is that your wife will not always be readily available when you need to pay for something...particularly in the beginning when that could tend to be the most important.

 

[CompelNJ]

I can understand why you would feel comfortable with that, but the problem you will encounter is that your wife will not always be readily available when you need to pay for something...particularly in the beginning when that could tend to be the most important.

I am going to be doing computer support. The purchases that will need to me made will not be immediate and those that will be immediate I will be able to pay with cash (under $100) and have the business reimburse me for the purchase. So I do not see it becoming an issue at this point in time.