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Business Accts. & Individual's Personal Login

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Question: 
My bank is getting ready to convert to a new online banking program. During this process, I have found that we have the option to allow some features as well as turn off others. Should we allow business accounts to be viewed under the individual’s personal login? For example, Jane Doe has personal accounts at CNB. She also owns “Jane's Closet, LLC” and has her business accounts at CNB too. She has 100% ownership of the LLC. Would you allow Jane to see Jane's Closet’s account under her personal log in? If not, what are the reasons why you would not allow this?
Answer: 

If the only access allowed is "viewing" the entity's account and activity, there would be no problem that I can think of. However, when "viewing" should never be allowed to expand to the point where the individual can move money between individual and entity accounts. That sort of activity can allow a creditor to "pierce the corporate veil" and seize assets of the LLC's owner to satisfy obligations of the LLC, and that is one of the principal reasons that LLCs and corporations are created -- to protect the assets of the owners.

First published on 02/10/2019

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