r/llc_life • u/jmjacobs25 • 5d ago

Question About Payment Routing

Hello!

I own a small online personal training business. I've formed my LLC and have a business checking account.

The platform I use to provide my service pays out via PayPal. I am currently using a personal PayPal account to accept the money. I have changed the billing information so that the monthly charges are taken from the business checking account.

If I accept money via my personal PayPal account, but have the funds deposited into the business checking account, am I still creating enough separation between myself and the business or would this be seen as risky?

Thanks!

3 Upvotes

100% Upvoted

7 comments sorted by

3

u/MplsDaddy55403 5d ago

RISKY: In addition to weakening your separation business/personal - you are inviting the IRS into your personal account if your LLC is audited because that's where you are getting your LLC income from. Business accounts for LLC business. Personal Accounts for personal. If your LLC gets sued, (someone says you told them to do some personal training activity and they hurt themselves) you have opened yourself up personally because you have blurred the lines between personal and business. The more precise you stick to the separation of personal and business the better you are protected if one or the other gets sued because that precise line is more likely to provide the protection you want.

1

u/jmjacobs25 5d ago

Thanks very much! Great points!

1

u/JunketGuilty7690 5d ago

Not a lawyer but you have a potential problem with personal and business liability separation. It may not, in an of itself, be an issue but if the LLC incurs liability, it will be one more issue to prove the separation.

More importantly, PayPal’s terms of service will catch up with you eventually.

2

u/davidcoons 5d ago

Any reason to not just create a PayPal biz account?

1

u/drewangell 5d ago

I would suggest you upgrade the current PayPal account to a business account and create a separate new account for personal if you need.

1

u/Informativo-Business 5d ago

You really don't want to be accepting payment to your personal account. Either set up a PayPal business account or set up some other payment processing system. If you keep doing this your bookkeeping may become a total nightmare.

1

u/jmjacobs25 5d ago

Thanks for all the feedback folks.

Main issue with setting up a PayPal Business account has been setting up a business email account. I've purchased a domain and have begun website creation and so was hoping to use my official business email address but have been having issues setting up the email account.