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Why it’s not their money

Question: 
Barney and Linda are the sole owners of BarLin, Inc. Since it is their company, why can’t they put the checks payable to the company in their personal account and save a step?
Answer: 

It’s not their money until it’s been processed through the company and paid out as salary, expense reimbursement, or a distribution. Those checks are assets of the corporation and subject to the claims of its creditors. Allowing the checks to go into a personal account is conversion and it can cost the bank big bucks.
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Learn more about Mary Beth Guard’s webinar
Insider’s Guide to Operations Procedures

First published on 07/29/2018

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