MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

Stop Mixing Your Bank Accounts! 🛑

20 May 2026 · 1 min

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In this concise business‑law advisory, Mark Kohler warns LLC owners that using a personal bank account for company money destroys the legal separation that protects the entity. He explains that an LLC is a distinct legal person, and mixing funds—such as depositing business income into a personal account or paying personal expenses from the business account—blurs that line. Kohler outlines the correct financial flow: business income must be deposited into the business account, business expenses must be paid from that account, and personal expenses should be covered with owner draws taken from the company. He also cautions against any loan arrangements between the owner and the LLC, emphasizing that both directions of lending are prohibited. The overall message is that failing to keep accounts separate jeopardizes liability protection and can trigger audit problems.

Chapters

If your LLC does not have a separate bank account, we've got a problem. This is one of the fastest ways to undermine your own protection and cause a problem in an audit. The whole point of an entity is separation. You are a person, the entity is another legal person, I guess, or entity that is separate from you. A corporation is a legal person. When you mix the money between the company and you, you're blurring the line. What does that look like? Business income going into your personal account or personal expenses coming out of your business account. We need business income, to go into the business account. We need business expenses to be paid for by the business. Personal expenses are paid for personally. Owner draws come outta your company and then you pay for those personal expenses. There shouldn't be any loaning going back and forth between you and the company either. You don't loan the company money and the company doesn't loan you money. If someone's trying to teach you that concept, be careful.