Can I Create a Joint Account With an LLC?Explained with Advantages & Disadvantages

Lisa Borga

A joint account is a handy way to allow you and your business partners to gain full access to your business’s finances with greater transparency and control compared with only one signatory for a business bank account.

Forming a  limited liability company (LLC) with a partner is a great business structure for allowing all of you to operate your business however you choose while shielding personal assets from liability.

However, in order to reap these benefits, you first have to figure out how your finances will be handled.

The first step is to determine what type of bank account you will open for your business, and often the best option is a joint business bank account, and here is why.

What Is a Joint Bank Account?

joint account for llc

A joint bank account is a bank account in which multiple people divide ownership of the account equally amongst each other.

Every person listed on the account has equal access and rights to the account and all of its contents.

This means that you and all of your partners listed as owners of a joint bank account have equal access to deposit, withdraw, and transfer funds.

This means that all signed parties are able to conduct business using the account and all have a debit card providing them access.

This can be extremely convenient for business partners when it comes to conducting business quickly and efficiently.

Though it also means that a particularly high degree of trust is required before opening such an account.

Joint Accounts come in two different varieties, just like regular personal and business bank accounts.

This includes both checking and savings accounts.

However, the former is much more common for LLCs and other business structures.

This is because most business owners are looking to pay vendors and receive payments, not store money away for the future.

Can I Use a Joint Account for My LLC?

Yes, a joint account is one of the best options for multiple LLC members to streamline and manage their finances.

Both joint checking and savings accounts are available and widely used for partnerships, LLCs, and corporations with multiple members.

It is important to have at least one business bank account to separate business from personal finances.

For larger companies with many members, this will often be a traditional business bank account set up using the name and tax information associated with the business.

However, this has the disadvantage of limiting access and transparency among members of the LLC.

For companies with two or more members, this type of account is a strong option.

A joint account between LLC members can offer many advantages and are a popular option among small to mid-sized companies.

Advantages & Disadvantages of Joint Account for LLCs

Best Business Bank Accounts for LLC

Advantages of a Joint Account for LLCs

A joint account can offer LLC owners several advantages, including:

  • Convenient To Manage Finances: A joint account makes it possible to manage all business transactions from a single account to which all members have access.
  • Increased Transparency: Each signed member has access to the account which means they can independently take cash flow and reserves into account before conducting business.
  • Easier Tax Preparation: As with traditional business accounts, having all financial transactions centralized into a single account simplifies tax preparation.
  • Makes It Easy To Offer Account Access to Additional Users: Employees can be issued business credit or debit cards from a single centralized account.
  • Increased Deposit Insurance: With a joint account, the Federal Deposit Insurance Corporation coverage will provide insurance coverage for each owner on the account for up to $250,000. This can provide an additional safety barrier for company funds should the bank, for some reason, be unable to repay funds.

Whether it is a traditional business bank account or a joint account, it is crucial for an LLC to possess a bank account in order to acquire business financing.

Most lenders will examine several months’ worth of a company’s bank statements before making any lending decisions.

This is true for business lines of credit as well as long-term loans.

Disadvantages of a Joint Account for LLCs

Just as a joint account can offer LLC owners some advantages, there are some drawbacks to consider, and here are some of the biggest.

  • Risk of Mismanagement: Each signed member on the account will have an equal level of ownership control over the account. This means that if one member mismanages the account or potentially builds up debt on it, every member will be affected. This can be devastating to both your business and your relationship with your partners on the account.
  • Low Protection for Individual Assets: In the event that one member runs up a large personal debt, creditors may be able to come after your joint account, which can create financial problems for every member signed onto the account. In some states, creditors are barred from this, so it is worth checking your state’s regulations to determine if this is the case before opening a joint account.
  • Asset Division Can Be Challenging: With a joint account, each member possesses equal ownership rights. This means that if the business dissolves, the division of assets can be a challenge, particularly if the dissolution is on poor terms.
  • Increased Potential for Error: With more than one individual managing the account, there is a much higher potential for miscommunication and errors to occur. This could include bounced checks, late payments, and other errors that could lead to fees and damaged client and vendor relationships. As a result, it is crucial to ensure that appropriate systems are in place to minimize the chance of errors.

Important Considerations Before Opening a Joint Account

There are some important considerations LLC owners should take into account before opening a joint business bank account.

Unlike a traditional business bank account which will generally be limited to certain authorized individuals, a joint account means each listed member of your LLC will have equal access, just like a joint bank account between spouses.

Each signed owner will have equal ownership, access, and control over the account, which involves a lot of trust and responsibility.

It is likely that each member’s livelihood will be at stake in appropriately managing the business’s money, so it is important to consider this when deciding to include any partners in a joint business account.

As such, it is important to have ground rules and a detailed agreement in place before opening a joint business account for your LLC.

This may be set out in the LLC’s operating agreement, and every member that will be listed on the account should understand and sign the agreement.

This will help prevent disputes and ensure that everyone is on the same page.

Why Not Use a Personal Bank Account for Your LLC?

It may be tempting to use a personal bank account jointly for both your personal and business finances.

However, this is not recommended for LLC owners.

In addition to potentially looking unprofessional to potential clients and vendors, one of the primary benefits of an LLC is the shield it provides against personal liability for business debts, just like C-type corporations offer their shareholders.

However, this protection from liability only applies if the LLC is treated as a distinct entity which means its finances should not be blended with any member’s personal finances.

When this does occur, it is referred to as “piercing the corporate veil,” and a court may judge that the members are responsible for the debts of the LLC.

This will allow the LLC’s debtors to claim the personal assets of its owners in order to satisfy debts.

In the event of a lawsuit or business failure, this could cause the loss of the LLC owners’ personal finances, homes, cars, and other possessions.

How To Open a Joint Business Bank Account

The exact process for opening a joint business bank account will vary depending upon the bank providing the account.

However, some information and procedures will generally remain the same no matter which financial institution is used.

Create Rules for Managing the Joint Account

The rules for managing the joint account should be set out in the LLC’s operating agreement in addition to any procedures for amending the procedures down the line.

This is critical to ensure smooth and effective management of financial resources as well as to prevent disputes that could interfere with business operations.

It is important for every member of the LLC who will be listed on the account to take part in writing the agreement and sign it before attempting to open a joint account.

These rules should include details such as:

  • Who will be in charge of managing the account;
  • Who is able to withdraw funds from the account;
  • What will become of the assets in the account if the LLC is dissolved; and
  • Who will have permission to grant access to the account?

These things should always be set out prior to opening the account and placing financial assets under joint control.

Keep in mind that if it is needed, the agreement can be amended down the line if any changes are needed or as members of the LLC come and go.

Gather the Necessary Information and Documentation

No matter which bank you choose, some basic information and documentation will be needed in order to open a joint business account.

This includes:

Apply for a Joint Business Bank Account

You can generally begin the process of applying for a joint business bank account online.

Depending upon the financial institution providing the bank account, it may be necessary to visit a branch in person and fill out the paperwork.

However, in some cases, you may be able to upload any needed documentation online.

If all of your information and documentation are together, you will often be able to fill out any paperwork and have your account opened on the same day.

How To Avoid Risk When Opening a Joint LLC Account

In order to avoid risks when running a joint business bank account for your LLC, here are some precautions to take:

  • Keep Clear Accounting Records: A high degree of transparency is necessary when multiple LLC members share a joint account. As a result, it is important for all transactions to be clearly recorded in an easy-to-understand way.
  • Have an Agreement in Place: A clear agreement for how the joint account will be managed and how assets will be handled in the case of dissolution is a must. This can avoid disagreements and ensure that everyone is on the same page.
  • Be Aware of Your Partners’ Financial Situation: When entering into a joint account, it is crucial to understand your partners’ financial situations and what they will be contributing financially to the business. It may be risky to allow someone with a great deal of personal debt to have complete access to the company’s accounts.


A joint business bank account is a great option for LLCs and can promote transparency and easy access between members.

However, there are risks involved for the co-owners, and it is important to ensure that each of the LLC members signed onto the account is aware of and agrees to a detailed plan for how the account will be run.

When properly managed, a joint account can be a great choice that offers many benefits.


Can you open a joint business bank account?

Opening a joint business bank account is no more difficult than opening a regular business bank account.

In most cases, the process will be the same but with the addition of multiple signatories that will provide their own personal information to open the account and who will share ownership and responsibility.

Can you add someone to your business bank account?

It is not difficult to add someone to an existing business bank account.

The individual being added will generally need to visit the bank that holds the account with the current owner.

Here, both individuals will need to complete and sign an application for joint ownership and present identification.

Can two LLCs use the same bank account?

Though it is technically possible for two LLCs with the same owner to operate a single bank account, it is generally not a good idea.

Using the same account for two companies can make it extremely difficult to connect business expenses to a particular company, and in the event that one business struggles, it may result in a loss of funds for both companies.

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  1. Cornell Law School "Piercing the Corporate Veil" Page 1 . October 19, 2022

  2. Cornell Law School "operating agreement" Page 1 . October 19, 2022