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I am contemplating starting a small buisiness. I have a name for the
business that I would like my first client to make a check out to. I
have not set up this company as a "doing buisness as" or
"incorporated." I don't have a bank account for this company.
My question can I endorse this check over to myself and deposit it in
my personal bank account. I will give my social security number for
1099 tax purposes. I am not trying to scam anyone. I'm just not sure
if this business is really going to go anywhere. But, I do have 1 sure
client for at least a 1 time event.
The best answer is to have the client make the check to you personally.
It's legal to have the check made out to the business name, and it's
possible to get it deposited, but there are risks. If you are going to
deposit it into your personnal account, why would you care that it is made
out to you personally?
Here's the problem. If the business is going to be a corporation, the board
of directors will authorize somebody to sign and endorse checks. That
hasn't been done yet, so you have no authority to endorse. If the business
will be a dba that hasn't been filed yet, it's not legal for you to do
business under a ficticious name.
Neither of those problems will be a big deal, probably, because banks don't
check endorsements or even the signature on the check. They will deposit
anything that looks like it will flow through the clearinghouse system. But
what if the check bounces or payment is stopped? You can't show that you
have any right to sue on a check made out to Gigantor Products Company (or
whatever).
If the check is made out to you personally, and you deposit it into your
account, and later you form a business entity, transfer the money to the
business account, and properly record the revenue. It's easy.