Last week in the Freedom Friday blog and email newsletter we continued the series, “10 Steps to Starting a Small Business in 2022,” and we covered the fifth step, which is to apply for an EIN. In today's Freedom Friday blog and email newsletter, we're going to talk about the sixth step. Once you have developed a business plan, gathered your team, chosen your entity, created your operating agreement or bylaws, and applied for your EIN, the sixth step is to open business bank accounts.
If you're a small business owner, its important to keep your business assets separate from your personal assets. This is especially true because if you mix your business assets with your personal assets, you open yourself up to liability if your business gets sued. This is another reason why its important to maintain formalities with your small business. If your business gets sued, you don't want your home, your car, or your other assets in your own name to be at risk through “piercing the corporate veil.” An important step to protect your personal assets is to keep separate bank account(s) for your small business.
As a small business owner, you will want to open at least one business bank account, or possibly additional business bank accounts. In order to open a business bank account, you'll need our EIN number, a copy of your articles of organization (for an LLC) or a copy of your certificate of incorporation (for a corporation), and possibly additional paperwork as required by your bank. Some banks will also require a “resolution” for you to open your business bank account. You might need to draft the “resolution” yourself, or the bank might draft one for you using their required format. Also, I would shop around different banks and ask about the various fees and requirements that different banks might have; a bank that drafts the required “resolution” for you is usually “friendlier” to work with than a bank that requires you or your attorney to draft the “resolution” to meet their requirements.
Lastly, you'll notice that I mentioned you should open at least one business bank account, but you might wish to open more than one business bank account. There are some good reasons why you might want to open more than one bank account for your small business. First of all, you will need to open a checking account for your small business. You might also want to open a savings account, as well. However, many small business owners are interested in implementing “Profit First” ™ or a similar kind of bank account budgeting cash management system for your small business. If you wish to do this, then you will need to open multiple business bank accounts. As always, its best to consult with an accounting professional to help you with these decisions.
If you're interested in starting a small business in 2022, or you have any business law or business litigation need anywhere in the State of Oklahoma, please contact me at [email protected] to schedule a FREE strategy session.
For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/
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