Can you use own bank account if a Ltd Co?

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT member discussion
Hello,

I have just incorporated but can't open a business bank account. Am i doing anything wrong if i use my personal bank account to bank cheques etc?

Thanks

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Can you use own bank account if a Ltd Co?

    hi

    I asked a similar question a while ago - the client concerned has since opened a Ltd Co account so I stopped worrying about whether it was alright to use the old account or not.
    My post is here:
    http://www.aat.org.uk/forums/posts/list/12833.page

    might help you a bit
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Can you use own bank account if a Ltd Co?

    Why can't you open a business bank account? Also if you are trading under "Accountants R Us Ltd" then surely your bank won't let you bank cheques made out as such into your personal account :roll:

    Claudia
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Can you use own bank account if a Ltd Co?

    Hi Claudia,

    I am asking clients to make cheques payable to me as I said I cant open a business bank account my bank wont let us have one yet.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Can you use own bank account if a Ltd Co?

    From what im aware of and have been told in the past is that if your a registered ltd company u need a bank account under the ltd company name.

    I could be wrong though.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Can you use own bank account if a Ltd Co?

    I cant do anything about it. the bank wont give us one so i have no choice but to use my personal account.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Can you use own bank account if a Ltd Co?

    Sorry to be personal, but have you got a bad credit rating? If not banks are quite happy to open ltd co bank accounts - then just need to launder the directors as people and see all the legal stuff - especially if you don't want to borrow money.

    I have got a client who had "problems" with his bank and went to Alliance & Leicester, and another with a chequered history who did the same - though I dont think either of them are allowed overdrafts.

    Hope this helps you, as it is something that you need to be sorted out, as it won't look very professional trading as a ltd co, and then asking for cheques to be made out to you personally.

    I would also check that you aren't in contravention of the Companies Act - as you are in effect "only" an employee.

    Claudia
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Can you use own bank account if a Ltd Co?

    There is nothing illegal in using your own bank account, after all you are helping the company which, for some reason, does not have the ability to bank cheques at the moment.

    The problem lies with the tax and accounting treatment of those funds. Effectively you have extracted those funds from the company leaving you with a, presumably overdrawn, DLA.

    You then have the BIK and s.419 problems to contend with.

    Like Claudia I am unsure why your company cannot open a bank account but the only alternative I see is to open a bank accountant in your name and document that you hold it on trust for the benefit of the company. You would be the legal owner but the company would be the beneficial owner. Not something you can do with your existing personal account.

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