ECN Forum Forums General Topics of the Trade Business Related Discussion Company names

How about calling it "Moe-Rons Electric"?

Where is the law that says I MUST deposit any check received into a business account?

I don't know if it a law as such or more a requirement. I'm sure if you comb through the IRS documents relating to business operation and required record keeping you will find something.

However, as a sole propriotor I wouldn't think the bank would have a problem cashing it as long as it's properly endorsed.

Nothing to do with being a sole proprietor, it depends entirely on what name you have on the account. You could be Joe Schmoe Electric Inc and if you had a check made out to Joe Schmoe they would cash it as long as you were Joe Schmoe. If it were made out to Joe Schmoe Electric they would not cash it, you would have to deposit into the Joe Schmoe Electric Inc account. The bank doesn't care where the check came from only that it is made out to the person who is cashing it or sometimes that it is endorsed by that person. On the other hand anybody can deposit money into an account but checks must be made out to the name on the account.

These are bank rules and sometimes tellers don't always pay attention and things will slip by or they will bend the rules. That doesn't mean that that's the way they are supposed to operate.

-Hal

Deposit requirements would be based on what type of business (sole, part, corp, etc.).

Sole propriotor no one cares as long as the taxes are done what you do with your deposits.

If your talking a corp then it would be a state/SEC violation to deposit corp income into your personal account. That's called skiming. Taking money this way would be defroding shareholders.

Here is a current list with the SEC. You will find some of these companies fall into this catigory. http://www.sec.gov/divisions/enforce/claims.htm

If your stock is only owned by you then no one would care and the accountant probibly could make adjustments calling it a deposit then a draw.

If it was a partnership I would be P.O. and talking to an attorny if I found my partner was depositing business income into his personal account.

Hopefully a journeyman in your state can pull a permit,or else business will be very limited.In my state and the one east of me where I also do work,a master's license is required for getting a permit when the project requires one.Also in my state my particular insurance carrier will not insure a contractor who does not have a master's license.Of course I know that these things vary from state to state. Best of luck to you.

Not to get into a discussion about corporations and "piercing the corporate veil" here is my 2 cents on names. I think that you have the inherent right to use your own name as a business ie Joe Schmoe is not a dba since it is Joe now if Allan Shapiro is trying to be Joe Schmoe that is a dba. You can't be stopped by a name already in use if it is yours since that is you too. Maybe in the same county this is possible but if you are a Miller or some common name like that I think you can be yourself in business etc. Joe Miller Electrical etc.

Here is another thing to think of with regards to business entities...Sole Proprietor has unlimited liability for anything the business does this means that any judgement cannot be discharged in bankruptcy and you are personally responsible for that obligation...trust me that really sucks, corporate entities...take your pick are set up in a way that you are only responsible for what you have into the business provided you keep all the filings, books and legal documents in order...in other words you have a separate account and you keep all transactions of the business in there...the benefits of doing this far outweigh any gains you could get from skimming. If you are audited the IRS cannot look at your personal income tax return side by side with the corporation it is like having a shield around you...this is very handy and the added bonus is that corps are a lot less likely to be audited then a sole prop.

this means that any judgement cannot be discharged in bankruptcy

Thats true for taxes owed but other debts such as from suppliers, credit cards and other business expenses can be discharged.

Oops, never mind, doesn't matter now, Bush just made all of that illegal!

-Hal