Business Financing— Don’t Intermingle Funds

Intermingling Funds A common problem with single-owner and other closely-held corporations is intermingling of funds. This occurs when a corporate shareholder uses his or her personal checking account for corporate deposits or payment of corporate expenses. Separation of funds can be a key in preserving the liability protection of the corporate veil. Courts can pierce the corporate veil by finding that the corporation is an “alter ego” of the shareholder, essentially stating that the corporation is not separate and distinct from the individual as evidenced by the intermingling of finances. Also, a shareholder who deposits personal funds or pays personal expenses from the corporate checking account is intermingling funds. For… Read More

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