Is using a separate personal chequing account for business legal?

[Brody James]

Is it legal for a Canadian corporation to use a separate personal chequing account coupled with a free business savings account in lieu of the conventional business chequing account?

 

[mnschwarz]

You and a corporation are seperate entities and should be treated as such. You can still pay for things with your personal cheques but you should be employed, or consult for your corporation with a contract that shows what are allowable expenses. You would then expense the corporation to reimburse yourself - everything documented and records retained for whatever the legal time requirement is in Canada.

Technically an offshore corporation should be doing the exact same thing; the difference being a lot of offshore jurisdictions have no requirements to maintain (or don't care to enforce) records so you don't need to worry about proving separation.

 

[Brody James]

You and a corporation are seperate entities and should be treated as such. You can still pay for things with your personal cheques but you should be employed, or consult for your corporation with a contract that shows what are allowable expenses. You would then expense the corporation to reimburse yourself - everything documented and records retained for whatever the legal time requirement is in Canada.

Technically an offshore corporation should be doing the exact same thing; the difference being a lot of offshore jurisdictions have no requirements to maintain (or don't care to enforce) records so you don't need to worry about proving separation.

Thanks for your response, mnschwarz. Do you have an official website about this topic? I have a hard time finding the right info.

Cheers
Brody James

 

[negon]

Thanks for your response, mnschwarz. Do you have an official website about this topic? I have a hard time finding the right info.

Cheers
Brody James

Offical website about how to avoid accounting and maintain records? if so, you already found it.. lot's of people here doing this every single day

 

[mnschwarz]

Thanks for your response, mnschwarz. Do you have an official website about this topic? I have a hard time finding the right info.

Cheers
Brody James

As auric mentioned above! If you're asking specifically about Canadian corporations though your best best will be a good accountant or lawyer. Some countries have different types of corporations (Americans have S type and C type for example) but the differences mostly relate to taxes I believe. Best to get local Canadian advice but the whole point of a corporation (not to be confused with an LLC) is that it is a separate legal entity. The fact that you may own all the shares or are the director does not mean you own the corporations money or other assets. You simply control it.