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Would using a personal credit card to buy things for a single-member PLLC risk weakening the protection it offers over personal assets, or is it fine as long as proper accounting is maintained?

It would be preferred to not have to obtain another credit card or use a debit card which directly ties to the bank account balance.

Based on looking online it seems like perhaps this is okay if entering an agreement between the entity and the individual to use the card, but it wasn't clear.

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  • What does the card's contract say? Some card issuers have different (i.e much higher) interest rates and fees for business customers, so they expressly exclude business use with their personal cards. And where in the world is this happening? USA?
    – user35069
    Commented Jan 26, 2022 at 15:29
  • Interesting point about the contract. Yes, USA
    – g491
    Commented Jan 27, 2022 at 1:38

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Would using a personal credit card to buy things for a single-member PLLC risk weakening the protection it offers over personal assets, or is it fine as long as proper accounting is maintained?

The process of treating an entity as if it does not exist for purposes of protecting the personal assets is an owner of the entity is called "piercing the corporate veil."

There isn't a bright line test to establish what constitutes grounds to pierce the corporate veil. Instead, there is a multi-factor list of relevant considerations which a court weighs, with on one factor being necessarily decisive, in making that determination.

Best practices, and the best evidence you could have at a trial, would be for the single-member company to use its own card (perhaps a debit card, which is easier to obtain) to make purchases.

Maintaining a proper accounting while using a personal credit card, ideally with a written agreement between the LLC and its sole member, spelling out the arrangement, is not as good as the company having its own card, but is much, much better than using a personal credit card without making any formal pre-dispute accounting.

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