If you’re running a sole proprietorship, it is possible to blur the line between your personal finances and those of your company. It is also possible to have this problem with limited liability corporations, if not properly set up. One important step you can make is to get a business credit card for your company. We’ll discuss some of the reason for doing this in today’s article.
First of all, you’ll want to keep all of your finances for your company separate from your own. There are two reasons for this. One reason is because you’ll want to keep information separate for your taxes. Two, you’ll want to protect the corporate veil in case your company is sued, goes into bankruptcy, or comes into some other distress.
If your personal spending habits blend with that of your company, you run the risk of having the corporate protection (made available to you in the LLC structure) broken. As such, you will want to use services such as a business credit card, or business line of credit, to keep your company’s transactions separate.
The other reason you would want to get a business credit card is that it provides the same flexibility of spending that your personal card does. It’s much like a line of credit in that it can only be used wherever the card logo is accepted. Also, a card for your company allows you to have cash on hand, much like petty cash.
So long as you are balancing out your books each month, in order to avoid paying excessive fees and interest, they can be very helpful tools.
For more information, go to Business Credit Card at http://www.unsecuredbizloan.com/business-credit-card/