Forums: Discussions for entrepreneurs and small business.

Hello, great forum here, there are many amazing and knowledgeable posters. I am just beginning in real estate investing and have formed my LLC and set up my bank account. I have come to the conclusion that qualifying for corporate credit will be much harder than I realized, not to mention time-consuming. Instead of going through this lengthy process what I am considering is personally financing my business for the first 2 years until I have built up some background with the company and then (hopefully) qualify for corporate credit. My main concern with doing this is co-mingling my funds and destroying the corporate veil. For the investment level I need, there will be little risk to my personal cash reserves. Can anyone tell me if there are any routes I can take to give my company the base it needs without ruining the veil? Thanks!

 

 

 

One of my lawyer friends wrote a short paper on piercing the corporate veil.  I posted a summary on my blog.  Hope this is helpful.

 

Marshall Lebovits

Ok, I found the answer to my question lies in the form of a written loan agreement. Here it is in case anybody out there is interested:

 

The business owner should never personally pay what are clearly business expenses from his personal accounts.

Who do I send the written loan agreement to? 

Who do I send the written loan agreement to? 

I am in a similar situation.  I just moved $2000 into my corporate checking from personal checking and will be moving about $7500 more based on a personal credit line.  I assumed this was ok since I am the owner this is basically investment in the company and all the company bills will be paid with this corporate checking account or corporate credit card.

 

Is this not the case?

For tax purpose is better to have separate accounts, business and personal and pay all business expenses with the corporate account, also when you put money into you business you should write that amount of money as a loan, accountably speaking, because when you start making money  you can paid the money back from that gains so in this way you don`t have to pay taxes for all your gains. if your are the still is good idea to have different accounts.

if you need a credit in your corporation name, you can build asking the credit card issuer to have the name of the company in the records, if you need to buy equipment buy it in the name of the corporation, some stores can give the credit in your corporation name. just to give some ideas.