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#1158248 - 04/06/09 03:57 PM LLC transfering to a Personal Account
Anonymous
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We have a customer at our banck that has both a business LLC account and a personal account. the customer is the sole owner on both accounts. The customer wants to make transfers from the LLC to the Personal account but we are telling the customer we cannot do that for them. What exact regulation/law covers this? Thanks

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#1158713 - 04/06/09 11:49 PM Re: LLC transfering to a Personal Account Anonymous
rlcarey Online
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rlcarey
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Galveston, TX
Whether he makes a transfer or writes a check from one account to the other, what difference does it really make? If this is a single member LLC, it most likely is a disregarded entity from an IRS perspective. While I can see why as a general rule you may not want to not allow wholesale transfers from business accounts to personal accounts, but under these circu@
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#1158786 - 04/07/09 01:51 PM Re: LLC transfering to a Personal Account Anonymous
Anonymous
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I'm sure the account for business is using the individual's SSN for reporting. The single member LLC is likened unto being taxed as a sole proprietor with the protection of being a LLC. We would allow sole proprietors to transfer from their business to their personal. I don't see the difference here for the SM LLC.

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#1159174 - 04/07/09 05:54 PM Re: LLC transfering to a Personal Account Anonymous
Tom at HOME Offline
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If they treat the LLC account as a personal account or if they move the funds to the personal account, the benefit of an LLC may have been lost. The owner may have given creditors the ability to piercing the corporate veil of the LLC. It is substance over form.

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#1160814 - 04/09/09 05:26 PM Re: LLC transfering to a Personal Account Tom at HOME
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Tom,

Are you using "piercing the corporate veil" in the loose sense of the word, as LLCs are not corporations? I don't think the LLC would be considered as treated like a personal account. As it is considered a disregarded entity if electing to be taxed as a sole proprietorship. Does it not still have the protection of limited liability for the owner.

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#1160962 - 04/09/09 06:52 PM Re: LLC transfering to a Personal Account Anonymous
Tom at HOME Offline
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Posts: 1,139
How a person chooses to be taxed is irrelevant. A corporation that is owned by one person may choose to report their tax on a schedule C and not a corporate return.

The benefit of a corporation, LLC, LP or LLP is the limitation to a person’s liability for business debt. That benefit may be lost if you treat the entity as yourself.

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#1161019 - 04/09/09 07:45 PM Re: LLC transfering to a Personal Account Tom at HOME
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So your saying that there is no difference between a sole proprietor and a SMLLC as far as personal liability?

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#1161220 - 04/10/09 12:42 AM Re: LLC transfering to a Personal Account Anonymous
rlcarey Online
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rlcarey
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Posts: 83,227
Galveston, TX
There is a big difference if you manage the SMLLC correctly. What Tome is saying is that if you mix personal transactions with the transactions of the SMLLC, then your corporate veil will most likely become transparent if push comes to shove.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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