Welcome to another edition of “Coffee with Carl”! Today, we’re diving into the world of bank accounts. Where should you set them up? Does it matter if they’re in the same state as your entity? Let’s explore the ins and outs of bank accounts together.
The Importance of Location
In an ideal scenario, your bank accounts should be set up in the same state as your entity. However, with the rise of online banking, the location of your bank has become less crucial. What matters most is simply having a bank account, regardless of where it is.
Footing and Business Location
Setting up a bank account in the same state as your entity can be advantageous in some situations. For instance, if legal matters arise and you find yourself in court, having a bank account in the same state can demonstrate that your business has a legitimate presence there.
Separate and Distinct Entities
Each of your entities should have its own bank account to maintain the separation between your assets. Just like Burger King and McDonald’s have separate bank accounts despite being in the same industry, treating your entities as distinct businesses is crucial. This separation is essential for legal purposes and ensures that your entities receive the respect they deserve.
The Reality of Bank Account Setup
Even if you go through the trouble of setting up a bank account in a specific state, there’s no guarantee that it will be done correctly. Banks often make mistakes, either assigning the wrong routing number or setting up the account in the wrong state. This is due to the various systems and processes they have in place for different states.
The Takeaway: Bank Account > Location
Ultimately, the priority is having a bank account for each of your entities. The location of the bank account has become less important in today’s digital age. As online banking continues to evolve, physical branch locations will become less significant. So, focus on securing those important bank accounts rather than worrying about their specific locations.
That’s all for today’s “Coffee with Carl”! We hope you found this discussion on bank accounts insightful. Remember to check out our free content on the Banking Blog for more in-depth and advanced strategies. Until next time, happy banking!
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