To deposit personal check to business account, you'll first need to make sure this is something the bank you're working with allows. While this is possible most of the time, the bank makes the final decision regarding whether or not a check can be deposited in this way.

Depositing Personal Checks to a Corporate Account

In many cases, you should have no problems depositing a check that has been personally made out to you into a business account by following these steps:

  • Endorse the back of the check using your personal signature.
  • Under the "Pay to the order of" section, add a "full endorsement."
  • Add your company's name to the full endorsement.
  • Include the standard endorsement for your business.

Keep in mind, though, that the bank reserves the right to make a final decision regarding whether or not they will allow you to make a deposit in this way. If they do allow it, they may have specific requirements regarding necessary endorsements. Normally, sole proprietors won't have as many issues making deposits like this as corporations or partnerships that list more than one signatory on a single account.

Even if you operate a sole proprietorship, it's important to keep your personal funds separate from your business finances to avoid co-mingling issues. A better option would be to deposit a check that has been personally made out to you into your personal checking account. You can then write a check to the company from your account. This is a simple way of providing the kind of documentation you'll need to show a distinction between the company's finances and your own.

Even still, it's a good idea to make a note of this deposit, including details such as whether or not it was a payment received for products or services provided by the company that was made out to you instead of the company or if you're loaning the money to your company for some reason.

Depositing a check made out to your business into your personal accounts is likely to create more issues than trying to deposit a personal check into a business account. This is true even if you're a sole proprietor. Deposits of this nature are generally viewed with suspicion. In all reality, this may make it seem like you're trying to use company funds to cover your personal expenses.

Some banks may allow you to make deposits like this occasionally if you're a sole proprietor or you're operating an unincorporated business. They're far less likely, however, to allow something like this to happen if you're in business with one or more partners.

Depositing business checks into a personal account may also expose you to:

  • Audits with the Internal Revenue Service
  • Negating certain legal protections that are provided by incorporated businesses

Can LLC Members Deposit Checks This Way?

A member of an LLC may be able to deposit a check made out to them rather than the company by simply endorsing the check as usual and depositing it into their account. There are, however, reasons to avoid doing this if at all possible, such as co-mingling financial assets.

Technically speaking, depositing a check in this way results in co-mingling your personal funds with those of the company. This is something that should be avoided at all costs from an accounting point of view. Legally speaking, however, there is nothing wrong with this kind of deposit as long as the check has been properly endorsed.

Where major legal concerns come into play is when a deposit is made in the opposite manner. That is, when a check is written out to the LLC and being deposited into a personal account. In some scenarios, such as when the LLC has more than one member and the others didn't authorize you to put company money into a personal account, it can easily be considered as fraud.

While it's perfectly legal to deposit a personal check into one of your LLC's business accounts, there are certain negative results that can arise from doing so. One such result is known as "piercing the veil" and can expose you to liability. Specifically, you may become personally responsible for some or all of the company's financial debt.

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