Entrepreneurship & Small Business

CPA & Amazon sellers I need you advice!

  • Last Updated:
  • Jun 11th, 2021 10:50 pm
[OP]
Newbie
Dec 13, 2019
18 posts
3 upvotes

CPA & Amazon sellers I need you advice!

I've been selling on Amazon.com for many years as sole proprietor. I am worried that if I change Legal Entity to corporation it would trigger temporary suspension until everything is verified. Suspension can last for weeks therefore I cannot afford losing profit and ranking. Someone suggested that maybe it will be possible to convert my personal bank account (bank account that is attached to my Amazon seller account) to a business account (under my corp) . Can someone confirm if something like this is possible?
14 replies
Deal Addict
Dec 13, 2007
1661 posts
126 upvotes
Toronto
xXxPurplePillxXx wrote: Someone suggested that maybe it will be possible to convert my personal bank account (bank account that is attached to my Amazon seller account) to a business account (under my corp) . Can someone confirm if something like this is possible?
Not possible.
Deal Addict
Dec 13, 2007
1661 posts
126 upvotes
Toronto
Ask your bank, they will tell you why.
[OP]
Newbie
Dec 13, 2019
18 posts
3 upvotes
slavka012 wrote: Ask your bank, they will tell you why.
So are you my bank? If you dont know why then don't comment about shit you dont know.
Deal Addict
Dec 13, 2007
1661 posts
126 upvotes
Toronto
If you are going to ask a question be prepared to get an answer you don't like. You should not really be concerned with why. Bottom line is you can't convert a personal account into a business .

Also, chill.
Member
Jan 18, 2017
334 posts
243 upvotes
So a possible (although ugly) solution would be just treat the personal account as an pseudo escrow account.

-- Stuff gets sold;
-- Payment gets deposited, temporarily, to personal account;
-- Funds from personal account are transferred to business account;
-- Business now has "income".

This would work, but is a two-step process, and for any type of volume this would get annoying. It also might violate terms of service, but nobody likes Big Tech anyway.

Sometimes it's better to just do the correct option, even it means you take a temporary hit.
______
Canadian & US tax guy (CPA)
Deal Addict
User avatar
Dec 23, 2015
1708 posts
2283 upvotes
xXxPurplePillxXx wrote: So are you my bank? If you dont know why then don't comment about shit you dont know.
I can see you are entitled to some free advice. BTW, what is it you're selling on Amazon?
.
Deal Addict
User avatar
Jan 19, 2007
1110 posts
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Torontario
Sole prop is you and your other I - Corporation is separate. As @slavka012 says neither the bank will do nor it's advisable.
These are different type of account-types at the banks, for which conversion is not possible: physical person vs. legal entity are subject to different KYC requirements and documentation

I feel your Amazon pain - a lot of people stumble on sole-prop to Incorporation growth of their business.
Have you asked through the Seller Central forums other sellers from Canada?
Newbie
Feb 4, 2017
94 posts
23 upvotes
Open a corp account with your bank. Then update your entity in your Amazon Seller account along with new banking info for deposits. No reason for Amazon to suspend your seller activities.
[OP]
Newbie
Dec 13, 2019
18 posts
3 upvotes
chumba wrote: Open a corp account with your bank. Then update your entity in your Amazon Seller account along with new banking info for deposits. No reason for Amazon to suspend your seller activities.
You clearly are new to selling to Amazon. Are you even selling on Amazon?
[OP]
Newbie
Dec 13, 2019
18 posts
3 upvotes
6060842 wrote: I can see you are entitled to some free advice. BTW, what is it you're selling on Amazon?
I don't think this question is relevant. I sell what I sell.

"I sell Garlic Press"
[OP]
Newbie
Dec 13, 2019
18 posts
3 upvotes
crossborderguy wrote: So a possible (although ugly) solution would be just treat the personal account as an pseudo escrow account.

-- Stuff gets sold;
-- Payment gets deposited, temporarily, to personal account;
-- Funds from personal account are transferred to business account;
-- Business now has "income".

This would work, but is a two-step process, and for any type of volume this would get annoying. It also might violate terms of service, but nobody likes Big Tech anyway.

Sometimes it's better to just do the correct option, even it means you take a temporary hit.
That's what my CPA just told me too. He said I could basically transfer all business related deposits from Amazon directly back to my business bank account (under my corp). He also said how I could basically create a Trustee agreement between myself and my corporation and therefore it will be considered legal in the eyes of the law (referring to CRA) when filing for taxes.
Deal Fanatic
Mar 21, 2010
5773 posts
2608 upvotes
Toronto
xXxPurplePillxXx wrote: That's what my CPA just told me too. He said I could basically transfer all business related deposits from Amazon directly back to my business bank account (under my corp). He also said how I could basically create a Trustee agreement between myself and my corporation and therefore it will be considered legal in the eyes of the law (referring to CRA) when filing for taxes.
It's not really a CRA issue as long as you keep records and pay your taxes accurately.

The problem you are more likely to face is someone at the bank might notice that deposits coming into your personal account are flowed through into an account in a company's name. They could view this as potential money laundering behaviour or that they are in violation of their regulatory requirements because they do not know who their customer is (i.e., their records say the customer is a person, when the real customer is actually a corporation that is a distinct legal person from its shareholder). They could also take action for purely self-serving reasons (business banking accounts are usually more expensive than personal ones and banks like collecting fees). The worst case scenario is the bank could choose to close your account without warning.

I don't know how to resolve it with Amazon but it's just something for you to be alert for because while it would be a major hassle to change your bank account, it is likely to be a much bigger hassle if you have to do it at a time not of your choosing because all of a sudden your bank account no longer functions.

At a minimum I would suggest using a bank account at a different bank (important, because banks often close all of a customer's accounts/bar them as a customer if they have a reason to close one of them) for all of your actual personal transactions. Leave this account just for your business transactions. It would be much cleaner from a record keeping perspective as well as not leaving you entirely high and dry if something happens.
Newbie
Feb 4, 2017
94 posts
23 upvotes
xXxPurplePillxXx wrote: You clearly are new to selling to Amazon. Are you even selling on Amazon?
Seeing as you're the one that's clueless on the topic, don't be so quick to judge. Yes, I do sell on Amazon, and yes, I've switched from a personal account to a corp. account (both with my bank, and via Amazon Seller Central to a business/corporate entity). To be completely honest here, try picking up the phone and calling an Amazon rep (or open a ticket) and ask what the process is. Amazon rules/regulations change so quick it's best to call them, and escalate if the tier 1 rep doesn't sound confident.

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