Hey everyone,

So, I just started my first LLC and I have a few questions about the idea of preserving the corporate veil. I get the general idea, but it's the specifics I don't understand. I understand that I (obviously) cannot use my business accounts or credit to buy personal items.

But when I opened my business bank accounts, I had to move personal assets into them in order to open them. Does that matter?

Also, what is the proper way to go about moving money from one of my business accounts into my personal accounts? I cannot simply transfer the money, correct? Do I have to write some specific kind of check? What about paying a payroll company to dispense a salary to me?

The website for my business as well as a fair amount of equipment was purchased by me personally very early on. How do I properly transfer these things over the business so as to preserve the corporate veil? Do I have to write a bill of sale? What exactly is involved?

I have a lot more questions, but I'll leave it at this point for now. Any help anyone has to offer will be greatly appreciated. I want to make sure I do this right from the beginning.

Thank you in advance!

--- MAC

No. However, if you intend for these assets to remain permanently as LLC assets henceforth, you should record them on the books as owner contributions to capital. If you intend to bring them back out sometime soon, you should record them as loans to the company (on the LLC's books the debit(s) to the various asset accounts for these items is offset by a credit to a liability account called "Loans From Member" or something similar).

As a member (owner) of the LLC you cannot receive payroll checks. To transfer funds from LLC to personal account, any ordinary LLC check will suffice. They should be recorded as "Member Draws", which hits the balance sheet as a reduction of equity.

These items should likely be recorded as contributions to capital. Generally, you'd debit the asset account and credit an equity account called "Member's Capital" or similar. Only in certain unusual circumstances should such transfers be booked as bona fide sales from the partner to the company.