Hello,
I just recently opened a SMLLC for my motorcycle racing team. One of my sponsors is providing me with a cash sponsorship this season. They sent me a wire transfer to my personal bank account. I plan to open a business bank account this week for the LLC but I needed to pay an invoice this week for expenses related to the race season, so I paid that invoice out of my personal bank account using the sponsor funds.
Will this be an issue that I already spent some of the funds before opening and depositing into the business account?
Thanks in advance!
It is always optimum to separate business and personal funds and never comingle the two.
Regardless, a single-member LLC (without an election to be treated as a corporation) is a disregarded entity for federal income tax purposes. In short, a SMLLC is effectively a sole proprietorship that files a Schedule C.
As a result, the fact that you spent the funds on certain expenses out of your personal account is not an issue.
It is always optimum to separate business and personal funds and never comingle the two.
Regardless, a single-member LLC (without an election to be treated as a corporation) is a disregarded entity for federal income tax purposes. In short, a SMLLC is effectively a sole proprietorship that files a Schedule C.
As a result, the fact that you spent the funds on certain expenses out of your personal account is not an issue.