Managing multiple LLC's with one "master" bank account?

Question

We're looking at PM software; one of the vendors suggested setting up a single "master" bank account into which all our tenants (regardless of which of my 10 LLC their property belongs to) pay their monthly rent.  I would subsequently transfer the appropriate amounts into each LLC's bank account.  Does this violate the spirit of a LLC, i.e. are we breaking that veil?  The reason for this set-up is to avoid establishing 10 ACH accounts via my software vendor (set-up and monthly fees are high).  thanks.

Jeff B. · Answer

LLC-a is manange by LLC-b is managed by LLC-c ...

Robert Gilstrap · Answer

@Johan Praats having 10 banks accounts for 10 LLC's is ridiculous and unnecessary (assuming they are single member LLC's that you own)

The "corporate veil" is the difference between corporate assets and personal assets. The big deal is not to commingle personal money, bills, debts, or assets with corporate. From what you describe it's almost like you are acting as a property manager for your 10 LLC's which is an even better way to avoid multiple bank accounts.

Wade Fisher · Answer

Would this system of a Master Account to receive payment be any different than that of a property management company?.

@Johan Praats

I fail to see why it would be.  If the other LLC's are owned by the master then they shouldn't need to have a realtor license to work in that capacity?  Have a written agreement between LLC's?

Just my thoughts.  I am not a professional at these structures.

This would simplify the billings and collections. Then other expenses and information are kept on the end LLC's for good accounting.

Please chime in anyone.  This is something I have debated myself.

FYI, I am the sole member of my LLC's

Trevor Ewen · Answer

@Johan Praats

I agree with @Jeff B. I recommend, however, using a bank that lets you view all of your business accounts via the same dashboard... this will help you do the actual work with a few less logins.

Definitely keep them separate, and it helps to keep each LLC honest as well. You don't want the low performers to be missed by the good ones. Separate bank accounts are a blessing and a curse.

Johan Praats · Answer

Thanks Jeff,.  What does "in the chain of the Manager" mean?

Jeff B. · Answer

IMO, yes a single account is a problem - - the question becomes literally, "Who owns the account"?

Each legal entity needs to be isolated one from the other, except in the chain of the Manager.

Managing multiple LLC's with one "master" bank account?

Most Popular Reply