Your Business Needs To Be An Entity To become bankable your business must be a separate legal entity

The only way to completely separate your personal credit from your business’s credit is to have a legal business entity such as an Incorporation or LLC. Action items for this step:

  1. Set up a business entity or make sure your business entity is set up correctly.
  2. Verify that your business legal name is not going to create any trademark infringement.
  3. Make sure your entity is “In Good Standing” and Foreign File your entity if required.
  4. Your entity should be filed using a USPS listed business address, not a residence or mail stop.

Why do you need a business entity to build business credit? It is best to build business credit with an LLC or Corporation (S or C Corporation). Creditors, Lenders, Trade Accounts and so on prefer to see an actual business entity. Furthermore filing and using a business entity to build business credit can separate you personally from the liability of operating your business. Unless you’re required to operate as a LLP or other type of partnership (Medical Practice, Law Firm, CPA, etc.), you should create a business entity. Your personal and business credit can never be truly separated if you operate as a sole proprietorship or partnership – everything you do remains “personal”. Don’t be fooled! The business credit reporting agencies will let you build business credit reports under a sole prop or partnership but these are completely worthless as everything you do under those is 100% personal which makes you personally liable for each and every business debt. Don’t do it. Compliance Item – Must Have A Business Entity Compliance Item Fix – Form An Entity Haven’t formed an LLC, C-Corp or S-Corp for your business yet? Protecting your personal credit and assets is just one of many reasons to operate your company as a separate entity (LLC, C-Corp, S-Corp, etc.). Whether you’re a single owner-operator or a larger company with employees, it’s the right decision. Get set up easily with a corporate entity that best fits your needs. Your business cannot become Bankable and stand on it’s own for financing without being its own entity.