What is co-mingling anyway, and what’s wrong with co-mingling my funds?

Well, would you throw away a $500 watch, or ring?  How about five $100 bills?  

In Massachusetts, that’s what you pay yearly to maintain your limited liability.  And this is protection from another legal entity being able to acquire all your personal assets should your company be found legally liable.

That protection “limits” your “liability” to the assets of your company.  However, there are strict rules as to how and when you can transfer assets (money) from your company accounts to your personal coffers.  

Co-mingling your funds (paying for company bills with personal assets and vice versa) is one of the things that can nullify this protection.  Transferring a set amount weekly or bi-weekly as owners pay is not co-mingling.  Paying for your gym membership with a company debit card is.  Or non-company vehicles, or mortgages on homes.  

It’s not what you want to hear, I know.  

Unless you drive to work, park your personal vehicle, get into your company vehicle, then finish your day, park your company vehicle at your place of business and drive your personal vehicle home, it’s not a company car.  There are many rules and regulations surrounding what is and is not co-mingling, but if your bookkeeper tells you it is commingling, don’t argue.  It’s not worth losing your house so you can have your gym membership on your business debit card.

Your bookkeeper isn’t telling you not to commingle because it needlessly complicates your books (which it does), they are telling you this because you nullify your liability protection by doing so.  Yes, you can continue to have your business cover personal expenses, and at the end of the day, it is your business, literally.  Your bookkeeper can’t stop you.  Nor can they stop you from losing your house when it all goes south.

Most people start a business to provide for themselves or their families.  It’s a powerful, wonderful thing to do and so powerfully American.  So much so that the government offers you a way to protect yourself from the risk of owning a business.  

So don’t throw out that $500 a year!  Manage your risk and protect yourself and your family by keeping your funds separate. CLICK HERE for our FREE Resource: 5 Commingling Rules to Follow

If you are really struggling to clarify what is or is not a business expense, set up a Consultation at this link: