Mistakenly deposited PERSONAL check into LLC BUSINESS ACCOUNT

[Stever_r]

What is the name of your state? Washington

1.) A friend of mine has a Single-Member LLC which receives income in the form of checks from other businesses.
2.) These checks are all made out to their LLC.
3.) Every week, they deposit a stack of these checks into their LLC Business Account via the ATM.

Today, my friend accidentally included a personal check in their stack of business checks. The personal check was for $80.00, and was a refund from their doctor (the doctor visit was cheaper than they anticipated). They had meant to deposit this $80.00 check into their Personal Account, but they accidentally stuck it in their pile of LLC checks.

Question: To maintain the integrity of their LLC (to avoid commingling issues) what should they do to fix this one-time screw-up?

 

[quincy]

If your friend is keeping his LLC account separate from his personal account on a regular basis, a single personal check deposited into the LLC in error should not be a problem. He can have the LLC issue him s check for $80.00 to recover the funds.

He should be keeping good records for his LLC - and making note of the erroneous deposit should probably be part of those good records.

If your friend is worried about this single check perhaps "piercing the corporate veil" and making his personal assets vulnerable should the LLC be sued, he can probably stop worrying.

But to be really safe, his LLC should try not do anything that invites a lawsuit.

 

[LdiJ]

If your friend is keeping his LLC account separate from his personal account on a regular basis, a single personal check deposited into the LLC in error should not be a problem. He can have the LLC issue him s check for $80.00 to recover the funds.

He should be keeping good records for his LLC - and making note of the erroneous deposit should probably be part of those good records.

If your friend is worried about this single check perhaps "piercing the corporate veil" and making his personal assets vulnerable should the LLC be sued, he can probably stop worrying.

But to be really safe, his LLC should try not do anything that invites a lawsuit.

And should have a business liability insurance policy. They are not particularly expensive.

 

[quincy]

And should have a business liability insurance policy. They are not particularly expensive.

Yes. Liability insurance is important for any business.

 

[Stever_r]

Thank you all! I'm surprised I couldn't find the answer anywhere else, so I'm pleased to see articulate and logical answers so quickly! Thank you all again!! My friend indicated an "over-the-top" course of action -- I'd be curious what you all would think. Here's what they're going to do:

1.) Have their bank issue a physical Cashiers Check for the $80 from the LLC to them personally.
2.) Take a Photograph of the Cashiers Check.
3.) Type out an "Event Log" describing what happened (basically what I described here for you all).
4.) They'll deposit the $80.00 Cashiers Check into their Personal Account and Photograph the Receipt.
5.) They'll have these 3 documents (Check photo, event log, and deposit receipt) NOTARIZED.
6.) They'll mail these three NOTARIZED Documents to their LLC via REGISTERED Mail.

This course of action will show: a.) They were aware of the error, and b.) They made full good faith attempt to correct the error.

Days later, their LLC will receive this sealed envelope, forever save this sealed envelope as documentation in case the need ever arises.

What do you all think? Is this all a good idea? Or does this have the opposite effect like you see in the movies (e.g. "hmmm... they sure are going to a lot of trouble, I wonder what they're trying to hide...

 

[Zigner]

That is way over the top, but if your friend wants to do it, then your friend can do it. It won't hurt anything.

 

[quincy]

Thank you all! I'm surprised I couldn't find the answer anywhere else, so I'm pleased to see articulate and logical answers so quickly! Thank you all again!! My friend indicated an "over-the-top" course of action -- I'd be curious what you all would think. Here's what they're going to do:

1.) Have their bank issue a physical Cashiers Check for the $80 from the LLC to them personally.
2.) Take a Photograph of the Cashiers Check.
3.) Type out an "Event Log" describing what happened (basically what I described here for you all).
4.) They'll deposit the $80.00 Cashiers Check into their Personal Account and Photograph the Receipt.
5.) They'll have these 3 documents (Check photo, event log, and deposit receipt) NOTARIZED.
6.) They'll mail these three NOTARIZED Documents to their LLC via REGISTERED Mail.

This course of action will show: a.) They were aware of the error, and b.) They made full good faith attempt to correct the error.

Days later, their LLC will receive this sealed envelope, forever save this sealed envelope as documentation in case the need ever arises.

What do you all think? Is this all a good idea? Or does this have the opposite effect like you see in the movies (e.g. "hmmm... they sure are going to a lot of trouble, I wonder what they're trying to hide...

I do not think that is necessary based on what happened but it won't hurt.