Personal Check into LLC account?

[Gwen1981]

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

Briefly:
1.) I've been a sole proprietor for decades.
2.) I formed my LLC last year and opened LLC bank account in November 2015.
3.) From November 2015 through August 2016 I continued doing business as myself, Sole Proprietor, using my Sole Proprietor bank account.
3.) Then, in August 2016 I finally got around to conducting business under my LLC (all money in and out only using my LLC bank account).

Today, I received a check made out to ME PERSONALLY (money owed to me earlier this year while I was still doing everything as a Sole Proprietor using my Sole Proprietor bank account -- even though my LLC formed months earlier).

What is the PROPER (safest for my LLC) thing to do with this check?

a.) Put into LLC ~ Endorse it to my LLC ("Pay to the order of My LLC" on the back).
b.) Put into my LLC but don't endorse it (bank will let this one slide).
c.) Deposit it into my Sole Proprietor account.
d.) Endorse it to a friend as a gift. (it's only for $30.00)
e.) Destroy the check (again, it's only for $30.00).

Hopefully I made my question clear. I just want to make sure NOT to do anything that could be seen as "comingling."

Thank you.

 

[LdiJ]

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

Briefly:
1.) I've been a sole proprietor for decades.
2.) I formed my LLC last year and opened LLC bank account in November 2015.
3.) From November 2015 through August 2016 I continued doing business as myself, Sole Proprietor, using my Sole Proprietor bank account.
3.) Then, in August 2016 I finally got around to conducting business under my LLC (all money in and out only using my LLC bank account).

Today, I received a check made out to ME PERSONALLY (money owed to me earlier this year while I was still doing everything as a Sole Proprietor using my Sole Proprietor bank account -- even though my LLC formed months earlier).

What is the PROPER (safest for my LLC) thing to do with this check?

a.) Put into LLC ~ Endorse it to my LLC ("Pay to the order of My LLC" on the back).
b.) Put into my LLC but don't endorse it (bank will let this one slide).
c.) Deposit it into my Sole Proprietor account.
d.) Endorse it to a friend as a gift. (it's only for $30.00)
e.) Destroy the check (again, it's only for $30.00).

Hopefully I made my question clear. I just want to make sure NOT to do anything that could be seen as "comingling."

Thank you.

You are WAY over worrying the issue. Just deposit it into your personal account. If you want the accounting records to perfectly match the bank account records then take 30.00 from your personal account and deposit it into your LLC account.

However, please realize that a single member LLC is a disregarded entity for tax and many other matters. Therefore you could have continued to use your sole proprietor account after you formed the LLC.

 

[FlyingRon]

Nothing wrong with endorsing the check over to the LLC. Depositing it into your account and transferring the money to the LLC (via check or whatever) isn't doing anything that endorsing hte check to the LLC isn't doing. That was a silly suggestion.

Frankly, this isn't much different than if they just handed you cash.

The only issue would be if the check was substantial (or part of a substantial payment) from someone you were doing personal services for that would lead them to file a 1099 for you. However, as pointed out, with a single member LLC, the LLC is for tax purposes a disregarded entity. In fact, I've gotten checks made out to me personally on my similar business. I'd prefer people wouldn't do that, but it is of no legal or tax consequence anyhow. Any income is reflected on my personal tax return either way.

 

[adjusterjack]

Hopefully I made my question clear. I just want to make sure NOT to do anything that could be seen as "comingling."

The disposition of the $30 check is harmless.

What has eroded any protection the LLC might have provided is the fact that you ran the business as a sole proprietorship for 10 months while you had the LLC.

All that has been discussed at length in your earlier thread:

https://forum.freeadvice.com/starting-operating-business-3/piercing-veil-llc-separate-personal-628155.html#post3435845

 

[quincy]

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

Briefly:
1.) I've been a sole proprietor for decades.
2.) I formed my LLC last year and opened LLC bank account in November 2015.
3.) From November 2015 through August 2016 I continued doing business as myself, Sole Proprietor, using my Sole Proprietor bank account.
3.) Then, in August 2016 I finally got around to conducting business under my LLC (all money in and out only using my LLC bank account).

Today, I received a check made out to ME PERSONALLY (money owed to me earlier this year while I was still doing everything as a Sole Proprietor using my Sole Proprietor bank account -- even though my LLC formed months earlier).

What is the PROPER (safest for my LLC) thing to do with this check?

a.) Put into LLC ~ Endorse it to my LLC ("Pay to the order of My LLC" on the back).
b.) Put into my LLC but don't endorse it (bank will let this one slide).
c.) Deposit it into my Sole Proprietor account.
d.) Endorse it to a friend as a gift. (it's only for $30.00)
e.) Destroy the check (again, it's only for $30.00).

Hopefully I made my question clear. I just want to make sure NOT to do anything that could be seen as "comingling."

Thank you.

I thought your user name sounded familiar.

Were you the "friend" in your other thread then or, like your friend, are you having problems understanding LLCs?

https://forum.freeadvice.com/starting-operating-business-3/piercing-veil-llc-separate-personal-628155.html

There were links to resources provided for your friend in your other thread, to local assistance in Washington. These might be good resources for you to check out, as well.

 

[Gwen1981]

Well Hi Quincy, how are you? Long time no talk. No, I'm not the friend.... it's just too complicated explaining that I'm trying to help a disabled friend... as you well know (or maybe was a part of), the last time I tried to do that it got really obnoxious. So I was just trying to avoid that, and instead ask in "first person." (I didn't realize you were still hanging around waiting for me to post again.)

Regarding this quote from an earlier reply, "What has eroded any protection the LLC might have provided is the fact that you ran the business as a sole proprietorship for 10 months while you had the LLC," I've given that some thought and that, frankly, is about as nuts as both the salted and unsalted.

Think about that for a second.... Who forms an LLC and "BAM" everything happens on that very day? For goddsakes it takes a full billing cycle to get some utilities to transfer over. And days/weeks/months for vendors to catch up. But, maybe y'all just stop all business, go on vacation and then do the "BAM now it's LLC time" thing.

Like, as if.... there's a "Master LLC Timing Manual" that says "any LLC that takes longer than X number of days shalt be subject to the thorn of erosion."

Gimme
a
break.

 

[quincy]

Well Hi Quincy, how are you? ...

I am fine, Gwen1981. Thank you for asking.

Two additional links that may lead you to help in your area of Washington:

http://business.wa.gov/
http://wsbdc.org/

In future postings here, I suggest that you are pleasant to all of the volunteers. It is you, after all, who is seeking out free help from us. You can take from this site what you find helpful (if anything) and leave the rest.

Good luck with your LLC.