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Question added to topic MoneyOctober 19, 2008

Which type of bank account do I need as a sole proprietor ?

I have just received my DBA and I'm ready to begin my own business (software consulting), so now I would like to clarify whether I can use (as I would like) my personal bank account for business purposes, too. A friend of mine says so, but on my bank website it looks like I need a business account.

Since it is a type of business entity that legally has no separate existence from the owner I feel I can use my personal account. But I would like to receive a confirmation about that.
CAN you use your personal bank account? Yes. There’s no law that says you can't, especially as you're operating as sole proprietor.

SHOULD you? Absolutely not. If you're serious about being in business, get serious about accounting for your business expenses and transactions properly by having a separate business account.

It can also save you money on accounting fees, as you'll save your accountant time and frustration trying to parse out your business from your personal expenses.

Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.

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