Separate Your Personal Life From Business
Separate Your Personal Life From Business
Its critical that you keep your personal identity and finances separate from your business entity and business finances. Co-mingling of activities and monies can get you in serious financial and legal trouble, even if there is no mal-intent on your part. A primary reason to form a business entity is to protect you and your personal assets from litigation of any sort.Financial Accounts
Business Bank Accounts
Getting a business bank account (checking and saving) will require you to verify you are an actual business. Typically what is needed to get an account(s) is:
- Employer Identification Number (EIN) or Social Security Number (SSN)
- Personal identification.
- Business formation documents.
- Ownership agreements.
- Business license.
- Certificate of assumed name.
- Monthly credit card revenue.
Merchant Providers
Merchant providers are the organizations that process credit card payments made your customers. Its common that your merchant provider will be the same as where ever you do your business banking.
On E-commerce platforms like Shopify, the platform will want you to use their merchant provider. You just provide your business bank account and routing number information.
Paypal
For online purchases this a common method customers use because it is a secured method they trust and if there is an issue the customers know they can easily submit a dispute of payment.
Whether the dispute is valid or not PayPal will "lock" that disputed amount on your account preventing you access to those funds. And those funds will be locked until the issue is resolved.
PayPal can be fickle when it comes to its algorithm detecting "suspicious" activity on your account. The algorithm is meant to protect your funds against fraud but can be tripped by authentic (meaning correct actual transactions) that may cause you to not have access to funds.
If you violate PayPal's terms and conditions causing a suspension or termination of your account know PayPal may hold all funds in that account for a period of time (180 days+). Beware of this and what that impact could have to your cash flow.