Answer:
by Brian Crow:
The Bank opens itself up to liability if the LLC's creditors, the IRS, etc. come looking for the LLCs funds only to find out that the owner was siphoning revenue into another business. The checks should be deposited into an account belonging to the LLC and then the owner can write a check payable to the corporation.
Answer:
by John Burnett:
The owner of the corporation and the LLC is perfectly able to direct those who issue checks to the LLC and the corporation how to list the payee. Your bank should resist following instructions to deposit the checks to accounts of the other entity. Allowing it runs counter to the separate legal entity concept and could expose the entities to asset seizures from one of the entities to satisfy obligations of the other. It's just a poor business practice.
That said, if your bank receives documentation allowing the owner of the two entities to indorse checks payable to each entity to the other entity, you could accept a check payable to the corporation for deposit to the LLC if it is indorsed by the corporation to the LLC and then indorsed for deposit by the LLC (and vice versa). If the bank doesn't want to do that (my bank would not), your customer can deposit the checks to whichever entity they are payable to and then issue checks from one entity to the other to get the funds where he wants them.
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