Establishing a Bank Account

Always Always Always keep personal banking separate from business banking. Once you mix the two it opens up a can of worms from a liability standpoint.

As you get started and before you start earning income, you will have to fund the expenses of starting a business.  It may seem silly to have to make a transfer from personal to business for a $10 per month web site payment. But in reality you need to transfer from personal to business first, then make the payment from business account. Again, if something goes wrong from a liability perspective, a plaintiff attorney will say you are doing business personally which makes you personally liable for business related debt.

There are two types of businesses bank accounts:  "Doing Business As" (DBA) and everything else.  A DBA is you doing a business in lieu of using your name. It's a separate account number but acts the same as a personal account. In New York State, you must register your DBA so do that first. See "Registering Your Business" Blog.

Always sign the checks in your business name, rather than your personal name. This may seem silly but just do it.  If someone questions or stops you, sign the business name first then your name as the Managing Director.

If you get the "everything else" account, this is a checking account in the name of your LLC or corporation. LLC is the way to go if you don't know what else to do. I recommend remaining a DBA until you actually make some cash then transferring over to an LLC simultanteous to taking a cash payment from your business. It only takes an hour or less to form an LLC in New York State.

Also, get your Tax ID. You don't need to be an LLC to get a Tax ID.  More on that in the "Registering Your Business" blog as well.

Open the account with about $100 and keep making owners equity deposits biweekly until you can cash out.  You will need about $1,000 - $5,000 in the account per year in order to cover overhead costs. Costs include your phone, transportation, insurance, professional fees, etc.  Anything you can charge to the business (legitimately), do it.