Can i pay corporate debt with personal monies?
I am trying to increase my new corporations’ credit score by moving some of my personal debt such as cell phone to my corporate account. If i pay this debt from my own pocket each month will i, or my corporation, be penalized, say tax wise, or any other way? This is a C corp.
matthewspeed on Wed, 3rd Feb 2010 1:39 pm
First of all, if you gave the cell phone company your SSN then it goes on your personal credit. You will have to open a corporate account with the mobile carrier to affect your corporation’s rating.
As for paying, what you are doing consitutes mingling of personal and corporate funds. DO NOT DO THIS. DO NOT DO THIS. When you do this you allow future creditors the opportunity to do something called “piercing the corporate veil” which allows them to attach your personal assets in the repayment of corporate debt. You must keep your money separate from corporate money. If you want to pay the corporation’s bills, write the corporation a check (recorded as owner equity or paid-in-capital) and have the corporation pay its bills.