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#2230362 - 02/05/20 11:44 PM LLC transfers funds to Personal Savings
Lele Offline
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Lele
Joined: Feb 2007
Posts: 825
In the Sun
This is the situation: The bank has a plan where clients when using their debit card, can have the 'cents' transferred to a savings account. In reviewing the accounts, it is noted that an LLC has had the 'cents' transferred to their personal savings account. The LLC has one authorized user and the savings is joint. Is there an issue with this type of transfer? The question is that we have set them up for this as opposed to them just making the transaction themselves... Thank you for your feedback!
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#2230363 - 02/06/20 12:04 AM Re: LLC transfers funds to Personal Savings Lele
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 76,410
Galveston, TX
One would think that such transfers would only be allowed between like ownership accounts. This has to be a nightmare when in comes to the LLC tax return information. Not sure why a bank would allow it.
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#2230365 - 02/06/20 12:22 AM Re: LLC transfers funds to Personal Savings Lele
BrianC Online
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BrianC
Joined: Nov 2004
Posts: 5,925
Illinois
Worse than tax implications, an attorney presented at a conference I attended and pointed out that in some states, allowing transfers between an entity and a personal account “breaks the deal of protection” that the organized business is supposed to provide the owner. In other words, the LLC’s creditors could claim that the owner should not be entitled to have personal assets protected from legal action since they transferred the LLC assets to a personal accounts.

To echo Randy, not only am I not sure why the bank would permit it, I’m not sure that the business owner would want it.
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