Keeping your LLCs separate

Somebody asked me the following question: 

"If you start a new LLC, but have old business credit cards from a previous (but now closed) LLC, can you use those credit cards with the new business without causing problems?"

It is a little bit like asking, "If my grandfather died and left behind some credit cards in his desk, can I use those cards for my spring break vacation without causing problems?"  I think you know the answer.

Creating a business entity is like giving birth to a new being.  For the most part, everything that entity does and owns is separate from you and the stuff you own.  The same goes for bank accounts, credit card accounts and credit history.  Also, everything the entity does and owns is separate from any other entity.  If you want to transfer property from one entity to another, or from yourself to your LLC, there has to be some actual transfer, ideally documented in writing.

**This post is for informational purposes only and does not constitute legal advice**

About Imke Ratschko


Imke Ratschko is a New York Attorney helping small businesses, business owners and entrepreneurs with all things "Small Business Law," such as litigation, contracts, business owner disputes, shareholder and operating agreements, sale or purchase of a business, investors, and starting a business. You can reach her at 212.253.1027.

4 comments

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  2. I like the answer, there is one thing clear here is that if you get caught you will surely regret your bad decision. sometimes circumstance shapes us into something we are not. however doing the right thing is a way of peace of mind.

  3. I propose not to hold off until you get enough amount of cash to buy all you need! You should just take the personal loans or just financial loan and feel yourself fine

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