How Many Bank Accounts Should You Set Up For Your LLC?

hey guys clint coons here and in this video i'm going to discuss how many bank accounts do you need for your limited liability company structure all right so now let's assume that you have one llc that you've created in your plan you just got one llc set up well that's pretty freaking obvious is it not you're going to need to have one bank account right here for this llc in order for it to operate its business because the last thing you want to do is be down here and paying all the bills on behalf of that llc because that's going to open someone up to vail piercy i mean if the llc gets sued by a tenant they'll say well you weren't truly treating that company as an llc because you yourself were collecting all the rents personally you were paying all the bills out of your personal name so you didn't recognize the independent structure of that company therefore we're gonna ignore it so generally speaking with one llc of course you've got to have one bank account now where things start to change is when you start to grow your structure out and so you start adding on additional limited liability companies here so now we've got four llc's and then you bring on that wyoming company down here like this so in this case run into people all the time they're in this scenario they got these llc set up maybe this one's oklahoma this one's in florida right here and this is in missouri over here and uh this one's in washington so people want to know clint how many bank accounts would i need to set up because i'm going to keep investing i'm going to have 10 15 20 llcs within the next four years and that's just way too many bank accounts for me to handle well what we the way i always look at this is you've got uh better and best now the best scenario i was going to tell you is always to set up one bank account per llc so in this case you're going to have five bank accounts each llc is going to have to have its own bank account now if you're just one of those individuals who just can't mentally wrap your head around having five bank accounts because to you it's going to be way too difficult to administer all that one point that i like to push back on is you can create all these bank accounts with the same bank even though you've got an ohio or florida missouri llc go down to your local chase bank and set up bank accounts form you can do it you just got to give them a local address to get that account opened now the idea here is if you have a separate bank account the benefit is that when you bring in your rental income the missouri llc it makes it really simple for your bookkeeper to know how much money came into that missouri llc what went out of the missouri llc you get an independent you get an owners statement that goes with that so that's a good strategy what we call the best strategies to have one bank account per llc and then they're all going to be linked online for example i use chase they're all linked online through chase so if you need to move money around you just jump on chase move the money as you need it you know as follows now if you still don't believe me and you're like too much work make it simple for me clint well then you could go possibly with this route maybe in in this scenario you're going to have a management company that you create up here maybe you have your own property management um llc that you put up top and so it's managing your limited liability companies so it's either dealing directly with the tenants itself or it's dealing with that uh pm that you have over here the out of state pm that's running all these property manager and so then in this instance you'll have all the funds flow into this llc so this property management llc will be collecting all of the funds on behalf of these properties now if you go this route granted you could go without these bank accounts now okay so you go without those bank accounts so you're going to have a bank account here at the property manager entity level you're still going to need one down here because this entity here is going to have to account for all the income for these particular limited liability companies so you got to keep good books and records i mean really good you should hire a bookkeeper all right to do this for you so it stays clean now the money comes in here and then from here it would come down into this account here and then from that account you could pull the money out here you can check out my video that uh on when to take distributions from your real estate llc and i go through some of this when you should be taking money out but if you're using this structure right here this is how you you would run it now if you don't have that property management company you don't you didn't establish something like this all right you're still you're down into this area and you just don't like the idea of having to have individual bank accounts here well the last option would be i mean you definitely have to have the account here and so in that scenario this is where the bank account is going to be you're not going to have them up here and that property manager now will will send the uh the owner statement and the income to this llc on a monthly basis now this structure right here i've set it up for many clients and i tell them the exact same thing again you have to have great books and records to account for all the income for these associated llc's but the reason why we're not setting up separate bank accounts here for each of these uh independent entities is because the pm up here that's managing it many times you know you've got properties in the same state they're not going to cut separate checks per llc or different wires they're only going to give you one wire on a monthly basis so you couldn't i mean if you did have a bank account it wouldn't do you any good you're still going to have to only collective funds at one particular entity so that's why that wyoming llc would be the one that would have the bank account with it so you know you can go simpler with this and if you do go that route you just have to make sure that you're keeping excellent books and records so that if you ever get audited or you're ever involved in a lawsuit you can show that you treat each entity as a separate entity and that you account for its income in a separate on a separate spreadsheet with separate sets of books for each of those structures so the choice is yours when it comes to opening up the bank accounts again the best strategy is to have every llc on its own bank account but if that proves problematic for you you just can't operate under that structure you still want the asset protection of the llc's then choose one of the other two forms examples explore those as an additional option all right guys hope you learned something on that and if you've got any questions leave those in the comments and be sure to subscribe to the channel as well take care [Music] [Music] bye

Channel: Clint Coons Esq. | Real Estate Asset Protection

Views: 32,726

Keywords: anderson advisors, anderson business advisors, asset protection, best banks for business checking account 2022, best business bank account, best checking account for llc, business bank account for small business, how many bank accounts should i have, how to open a business bank account, llc, llc bank account, real estate, real estate attorney, real estate investing, real estate investments, real estate lawyer, real estate llc, wyoming llc

Id: KkkedkpmCrc

Length: 7min 9sec (429 seconds)

Published: Mon Mar 28 2022