Endorsing Business Checks: Can You Cash Them Personally?

You can endorse over a business check to your personal account.

When conducting business, if you have a fictitious business name – such as ABC Company – customers usually submit payment to you with that name listed as the payee. This presents issues if you don't yet have a business bank account. In this situation, with a check written out to your business name, you might wonder if it is somehow possible to cash it against your personal bank account instead. In many cases, the bank will not allow you to use your personal account to deposit or cash the check, but they might make an exception if you can prove you're the business's owner or authorized representative.

Banks Usually Don't Allow It

In most cases, a bank does not allow you to endorse a business check over to your personal account the same way you would endorse a check in an individual's name. The reason is because the bank doesn't have a way to confirm you're entitled to the funds from the business check, or authorized to sign it over to your personal name. Banks might also face liability issues if they cash certain corporate checks to personal accounts on a regular basis.

Possible Exceptions to the Rules

One possible exception is if your name as the owner or representative is listed under the business name on the check, along with an address matching the account. If you have a close relationship with your bank, try to explain your situation to a representative in person. Bring a copy of your business registration and license proving that you are an owner or authorized representative.

In some cases, the bank might add the information to your signature card as a DBA, or doing business as name, so you can deposit company checks. In many cases, the bank will simply ask that you find another solution such as opening a business bank account.

Open a Business Account

If you're faced with this dilemma, the logical solution is to get a business bank account. Not only will this solve the issue with business checks, but opening a business bank account comes with other benefits like professionalism and the opportunity to establish a relationship with the bank for future business financing needs.

To open a business bank account, you'll need to bring your business registration paperwork, fictitious name registration and proof of your employer identification number with you, as well as your personal identification. You'll also need to bring any funds needed for a minimum opening deposit. Consider account terms like minimum balance requirements and fees when choosing the type of account to open.

If you do not want to open a business account, request that clients pay you in your personal name.

Consider Separation of Business Activities

Even if a bank were to allow you to cash business checks against a personal account, it is not a wise business practice. It complicates the process of gathering information regarding business income and expenses when doing taxes. It also makes it more difficult to separate your business and personal budgeting activities when you mix business earnings with personal funds.