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Depositing a Business Check Into a Personal Bank Account

Published 12/15/07 (Modified 3/8/11)
By MoneyBlueBook

Although I work a regular full time job, I also run a few fledgling side ventures on the side. As I mentioned about a month ago, I am currently attempting to establish a trade name and open a business bank account in the business' name to better keep track of venture earnings and assets.

However, I'm currently unable to establish a business bank account because the state agency hasn't processed and sent me my approved trade name certificate yet. I did not file for expedited service (*snapping fingers in a darnnit motion* ) so it's taking much longer than expected. Banks will not usually allow an individual to establish a business bank account that doesn't contain the applicant's name in the account title without a valid trade name or fictitious business certificate. So for now, I'm stuck without the services of a proper business bank account. However, meanwhile my side businesses have continued to generate income and now I have several business checks made out to my fictitious business name that I am unable to deposit immediately. It has been weeks and the business checks continue to sit on my desk gathering dust and looking quite lonely.

Ideally, business funds should not be co-mingled with personal funds since the Internal Revenue Service (IRS) will require the tax filer to account for his/her business income and expenses on a separate form, although both business and personal income will ultimately be treated as the tax filer's ordinary income. However, my checks have been sitting around un-deposited for some time and I am getting to the point where I want them in bank accounts and generating interest.

So Am I Permitted to Deposit Business Checks Into My Own Personal Bank Account?

I am tempted to just go ahead and deposit my business checks into my regular checking or savings account at Citibank. I am the only owner and operator of my sole proprietor business so there wouldn't be stakeholder problems. The pickle is whether my particular financial institution will permit the deposit or not.

Perhaps my deposit will be more willingly accepted by my bank's ATM machine than by a live teller. There are some readers out there that have indicated that an ATM made deposit will be more readily approved by the bank than one made at the counter since ATM transactions are mostly computerized. The idea is that so long as I properly endorse the back of the check with signatures containing the business name and my own name, the bank will likely accept it as valid, particularly if the check's numerical amount is not too significant. I'm just not certain on where the business checks go if the deposit into my personal account is denied and rejected.

There are no specific laws governing such deposits that I am aware of and it appears to be a policy decision governed and made by individual financial institutions. In general, business accounts involve higher sums of money with greater transactional frequency, thus demanding more of the financial institution's attention. This probably explains why many banks tend to require higher maintenance fees for business accounts than personal bank accounts. Because of the higher transactional costs and blanket policy reasons, some banks simply may not be willing to allow this sort of practice and may require business check depositors to open business checking account if they want to deposit a business check made out to the business' name.

Interestingly, online services like Google Adsense and a few others have permitted me to create direct deposit relationships with my own personal banking account, even though the checks were made payable out to my business name. I'm not sure if these were merely oversights or indicative of more flexible policies, but I wish there was more overall uniformity on the issue.

I think I may ultimately wait this out until my trade name certificate gets cleared since it should be approved in a few more weeks, but I wonder if anyone knows the answer for this question?

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36 Responses to “Depositing a Business Check Into a Personal Bank Account” 

  1. Sherry says:

    Thanks, Raymond. I think that's what I'm going to have to do. Unfortunately the company that issued the check has been really hard to get money from so I had to wait for this last check 10 months. To get them to reissue another with my personal name included might mean another long wait, so I'll probably just do as you suggest & open a business account. Like you, I've just always liked the convenience of putting my infrequent business checks directly into my personal account, but I've been looking for a reason to get away from Bank of America anyway, so maybe this is a good excuse to open this business account at another bank. I've been looking for a more small-town bank with still the convenience of online banking & such. I found one that I think will work, so guess it's just a matter of doing it now :-)

  2. Sherry says:

    Thanks "toead" for your comments. It seems I'm not the only one with this problem - good to know :-) My local Bank of America has really changed. My former "personal banker" won't even return calls now. He told me years ago that his customers were complaining that he didn't call them back but said he was over-worked. The former bank president was a really nice & smart lady but she's since moved on & unfortunately her replacement doesn't seem to have the same qualities. In fact, I believe that was who confirmed to this teller that "they don't do this" in regards to my wanting to deposit this business check into my personal checking; so after a brief argument, I just dropped it. I think the problem is that these large nationwide banks have become so impersonal that if people weren't locked into mortgages & credit cards, probably more of us would be heading to smaller banks, just for the chance to maybe be treated with logic & friendliness again. I mean it just doesn't make sense that these banks have been allowing something for years & all of a sudden someone thinks they don't do it anymore, so they refuse to even admit they ever did - how crazy, HAHA! I mean, why not just say "well, we used to do that but now we don't". I could accept that at least :-)

  3. toead says:

    Hey Sherry, good luck with finding a new bank, in my area, M&I or Harris are good.

  4. Sherry says:

    Thanks, "toead" - here there are mostly the larger national type banks, but there are a few credit unions & one bank that used to be a home savings & loan type, that has been consolidated but still isn't that large - just a few branches in the state. So, I think I'm going to give them a try. I just dread so much switching all the auto-drafts & my online banking, husband's paycheck direct deposit, etc. - such a hassle. Nothing seems easy now days :-)

  5. Travis says:

    So.. am I to understand this correctly, I have a side business without any DBA and received a check from a "client" that is made out to an alias, not my real name, but my real name is in alias just with a computing on the end of it, tomorrow when I go to deposit this into my account they will not let me?? that is wrong on so many levels..

  6. Sherry says:

    Hi Travis - I honestly think you've got a 50/50 shot because as I said, my bank allowed me to do it for five years before they suddenly claimed they had never done it before. Apparently, it's supposed to be against the law but I've heard from lots of people who say their bank allowed business checks to be deposited into their personal accounts too. I know I had to end up opening a business account (but at a different bank) & they told me I was signing up for the totally free checking account. Everything they'd ask me, I'd say "is this option free?" & they'd reply yes. When I got my first statement, it had a debit of just over $100 for my new checking package! So, I'm not sure you can find a bank that's simple & honest, like they were years ago, but good luck :-) Sherry

  7. toead says:

    Travis - Go ahead and deposit into your account as if routine. Sole proprieter does not require a business account. Just be prepared just in case. If they say it is against the law then asked them to print that law out for your future reference. They are professionals in their business and should have that at their finger tips. (There is no law). If they do nothing ask to see the branch president to find a solution to your dilema. I would wish you good luck but you shouldn't require luck but receive the service you deserve.

  8. JOHN DOE says:

    there is a way to cash business checks if MADE OUT TO THE BUSINESS AND you have a personal account IN YOUR OWN NAME dont let the checks sit around you need a friend who owns HIS OWN SMALL BUSINESS WHO HAS A BUSINESS CHECKING ACCOUNT SIGN CHECK OVER TO HIM AND HE CAN DEPOSIT THE CHECK FOR YOU HIS BANK WILL CASH THE CHECK AND YOU WILL GET PAID DONT LISTEN TO THEM DUMP BITCHES WHO WORK AT BANKS THERE IS NO ANSWERS WITH THESE DUMP ASSES.ITS THE LAW MY ASS.
    JOHN

  9. MARGO says:

    I initially had this same problem but can offer you a couple of options it will not hurt to try - should your problem today not already be resolved. Option (1): It is not expensive to alter the business name to include your entire first and last name followed by what will be your trade name or business name. Changes to your stationery and any existing papers for a "pending" business will cost little and will benefit your greatly later. Once the business is documented and exists and continually generating income/(profits) you can always change it to anything you like. Option (2): The existing checks you have in the business name - DO NOT ALTER - REPEAT - NEVER ALTER EXISTING CHECKS PAYABLE TO NAME - However, take one check to the ATM and do not even ENDORSE the check with any personal signature of any kind - Instead, on the reverse of the check, write only "FOR DEPOSIT ONLY TO ACCOUNT NO. XXXXXX" - attach your personal account deposit ticket completed reflecting the amount of the check and drop it in the ATM. It will not take long for you to know if it is accepted. LEAVE THE DEPOSITED CHECK AMOUNT in the account for an EXTENDED PERIOD than required and DO NOT WITHDRAW THE AMOUNT (THIS IS VERY IMPORTANT) to ensure that it is clear and posted. Then proceed with depositing one check per deposit weeks apart if you find the result favorable. THEN, future checks will be coming in with your name preceding the business name (per Option 1 above) and with these checks you should not have any problem proceeding to bulk deposits. DO NOT, REPEAT, DO NOT LEAVE THE CHECKS YOU ALREADY HAVE laying around "gathering dust" until them become STALE DATED CHECKS - and nothing will help-!!

    Please respond and let me know if you problem has been resolved. I run a legal assistance services business and just like to know if I have helped - it is gratifying.
    My email is canales1000@live.com.

    If you need more help, let me know - this one is FREE but be aware I do have business ethics to which I commit and charge for my services... You are welcomed.

  10. toead says:

    Looks like Lynn's thought process has run a muck. As sole proprietor, I have and will continue depositing checks made out to my company into my personal checking account. I know - should have turned on spell check and grammar. Have a nice Day!!!

  11. Joey Z says:

    Looks like this post has been going on for a while. I'm bored so I'll add my 2 cents. I work at a small local bank (not as a teller). From what I understand from asking our Teller Manager, Federal Law (might be the Uniform Commercial Code) requires that a check made payable to a business entity be deposited directly into an account belonging to that business entity. A sole-proprietorship isn't technically a business account, it's just a personal account (registered under the owner's SSN) that has the words, "Doing Business As" or "DBA" followed by the business name. Being a personal account, it's treated as normal. Depsoit it, cash it, sign it over to a third party, etc. If the business is a Partnership, Corporation, Non-Profit Org, etc, the check can only be depsoited. It can't be signed over to a third party, can't be cashed, and can't be desposited into any account other than one owned by a business named in the payee line. I imagine this is to prevent shady usage of business funds by account signers, and to help the IRS have a paper trail for all of the funds moved out of the account. Money laundering and tax-evasion often attempt to use business accounts to hide the origin of the funds. If a signer on a business account wants to withdraw cash, they must write a check payable to their own name, or simply to "cash". That way if the issue ever comes up, the bank can say, "Look, Mr. John Doe signed this check authorizing the business to give him money." Then John Doe is responsible for it.

    So to recap: If you have a check written to "Joe & Bob's Lawn Care", it can be cashed if the bank has an account including "Joe Smith, DBA 'Joe & Bob's Lawn Care'" or something close to that. If Joe & Bob's Lawn Care is actually Joe & Bob's Lawn Care, Inc (i.e., Joe and/or Bob provided documentation to the bank proving the government has incorporated that business itno it's own entity) the check can only be deposited, nothign else. If Joe or Bob wants cash, they need to write a check.

  12. Matt says:

    Thanks Joey Z, that was a great detailed explanation. I"m looking for a solution for future business checks to my sole proprietorship, so i'll just go in and change the acct name to add DBA "..". Thanks again!

  13. Stephen says:

    FYI for Bank of America customers, I just ran into exactly this issue (I have a sole proprietorship but in the past have always gotten checks with personal name rather than business name), and BoA told me by phone I would have no problem depositing to my personal account in a branch in person, as long as I brought a business card and/or other docs showing that I am doing business under the company name. She said they'd add the DBA to my personal account and I'd have no problems in the future.

  14. Sam says:

    Some banks require a trade name certificate for DBA's, but others do not. It depends on the size of the bank or if the bank has ever had issues with it in the past. Another solution for DBA's is to put on your invoices for all checks to be made payable to your name. This keeps you from having problems with the bank. A trade name certificate should be fairly easy to get. It is issued by the county clerks office or your city hall. Find the website for your town and see if they have the form easily printable.

  15. Lydell E. says:

    This thread reminds me of why I keep separate accounts for personal and business funds, though I'm sure this will be followed by conspiracy theories against doing so and flames for even bringing it up.

    Regardless, I just find that to b a simpler method of keeping track of business expenses related to the business without the headaches of what is or isn't legal or what a bank will or won't do. A lot of small business bank accounts function as personal accounts already (free to open, small opening deposit, etc.), so why not keep those funds separate?

  16. tamu says:

    Thanks, Raymond. I think that's what I'm going to have to do. Unfortunately the company that issued the check has been really hard to get money from so I had to wait for this last check 10 months. To get them to reissue another with my personal name included might mean another long wait, so I'll probably just do as you suggest & open a business account. Like you, I've just always liked the convenience of putting my infrequent business checks directly into my personal account, but I've been looking for a reason to get away from Bank of America anyway, so maybe this is a good excuse to open this business account at another bank. I've been looking for a more small-town bank with still the convenience of online banking & such. I found one that I think will work, so guess it's just a matter of doing it now :-)

  17. Jessica says:

    I work for a large bank. If you were to come see me with this predicament, here's what I would suggest:
    Open a sole proprietorship account. As long as your last name is included in the business name/title on the account, you do not need documentation. Have the banker add in a message with an AKA and the actual business title which does not include your last name.
    So, if I own a business called 'Mountain Crafts' and my last name is Smith, the account would be called 'Smith's Mountain Crafts, AKA Mountain Crafts' you can deposit checks payable to either, or to yourself as an individual. Once the paperwork comes through from the state, you can either change the name of the account or close this one and open a new in just the business name without your last name. Make sense? Good luck. I'd find a banker who is interested in helping find solutions/solve problems rather than telling you what you can't do.

  18. dyc says:

    Great info, however, I would like to ask what can be done with a business check (payable to the company name) received after a DBA business account has been closed? The check was for services rendered prior to the company closing, but received after the company and bank account has been closed.

  19. Robsta says:

    I always thought that the laws governing commercial paper superceded bank rules (like cashing third party checks and business checks into personal accounts). If there is such a law then i do believe the bank lobbys probably pushed it down the throats of Washington Legistlatures.

  20. adam says:

    i have a cheque made out to a business i know,the business cannot put the cheque into their bank account as they are well over drawn.i am waiting for the business to go to a cheque changing for cash company but it could take a while as he is busy and he dosent seem keen,he hasnt got an account there.is there anything i can do to cash the cheque myself.i have accounts with cheque changing companies.===========================================

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