My wife and I are starting separate businesses. Can we use the same business bank account? My business will use the account more as I am in the service industry and hers is in personal development. Should we set up 2 accounts or can we get by with using the same account?
For accounting/bookkeeping purposes, it is highly recommended to use separate bank accounts.
If your wife doesn’t plan on accepting cash, using an online bank such as Novo.co is a great affordable option. No monthly fees and integrates with Stripe easily.
Not an expert but here are a few thoughts. The short answer is yes you can do that. BUT, is it what you really want to do? I think of bank accounts when I am speaking to other people as being a customer at XYZ bank, but more specifically, an account is one account for checking, another account for savings, etc… With one customer account, it is super easy to open another checking or savings or multiples. Having a separate checking for your wife’s business might make accounting easier.
Commingling funds from two businesses does nothing for liability and likely increases the liability to the other business as they are run through one account which means it’s really only one business with multiple types of services. For example, one business might own a lawn mowing operation, a haircut business and a pizza joint. That is perfectly legal but not the best approach for asset protection.
I would go through the hassle of setting up a separate bank. I would seriously consider the extra hassle of setting up an LLC if there is risk of liability (being sued). There is no tax advantages to setting up an LLC for “mom and pop” businesses (without investors etc).
Good luck.
We covered this on today’s Open Forum Show today! The show will be released/uploaded to iTunes tomorrow on November 11th. Thanks so much for listening and participating!! Mark and Mat