Is my LLC still protecting me if I mixed personal and business money?
Short answer
Mixing personal and business money can weaken the liability protection your LLC gives you, so the first fix is one business bank account and one business card that you use only for business.
Otavio Mayole, Co-founder, DeCypher FinancialsUpdated
If you get one thing from this page, it's this: separate business and personal.
Here's why. If a brand, a coaching client or a customer sues your business and a court sees business and personal money mixed together, it can treat you and the LLC as the same thing. That's called piercing the corporate veil, and it can put your personal assets in play. Mixing also makes your books messier, hides write-offs, and invites questions from the IRS.
This is the most common issue we see on first calls, and it's fixable:
- Open a business checking account in your LLC's name.
- Pick one card for 100% business use.
- Send every brand deal, AdSense payout, TikTok payment and PayPal transfer to the business account.
- Update your W-9s with your LLC's EIN.
- Treat PayPal as a pass-through, not a bank. Move money to business checking.
- If a personal charge lands on the business card, flag it. If you paid for something business on a personal card, we can still capture it.
We take this seriously enough that it's in our client agreement. Once we've flagged it, we expect it fixed.