Ensuring your LLC holds up in Court

[Marc Beaulieu]

I recently spoke to an insurance salesman who told me that a judge can choose to not recognize your LLC if you do not have a business account in the LLC name that all your business activity flows through( for example depositing rent, paying mortgages, paying taxes, etc). I have two properties in an LLC and use a joint checking account with my business partner where we deposit rent and pay mortgages out of (no personal spending or other activity goes through this account it has strictly been used for business since we opened it three years ago). Does anyone know if what the insurance salesman said is true? If so, are there other things that need to be done in order for the LLC to be recognized in court (what i mean by recognized in court is the judge will let a tenant sue you personally instead of the LLC)?

[Lori Verni]

Instead of setting up automatic payments with the mortgage companies, you could simply set up an automatic monthly payment via your online billpay from your LLC bank account. That's always my preference anyway, this way I'm in charge of it, not leaving it up to the bank. This also allows me to change the amount without it being an ordeal (there are times I choose to "collect" all my cash flow in the account, and other periods of time I choose to pay more toward the mortgage), etc.