Yes, a sole proprietor can use a personal bank account for business transactions. Many sole proprietors do use their bank accounts for their business finances, especially when they are just starting. No legal restrictions are preventing a sole proprietor from using a personal account for business purposes.

However, while it is allowed, there are several reasons why it may be beneficial for a sole proprietor to consider opening a separate business bank account:

1. Separation of Finances: Keeping personal and business finances separate makes it easier to track business income and expenses, which is essential for accurate financial record-keeping, accounting, and tax reporting.
2. Professionalism: Using a business bank account can give your business a more professional appearance to clients and customers. It shows that you are treating your business as a separate entity.
3. Legal and Tax Compliance: Separating personal and business finances can help with legal and tax compliance. It simplifies the process of calculating and reporting business income and expenses for tax purposes.
4. Limited Liability Protection: While sole proprietors do not have the same liability protection as other business structures, maintaining separate accounts can help support the argument that the business is a distinct entity, which may be relevant in certain legal situations.
5. Easier Access to Business Services: Many banks offer specialized business banking services, such as business credit cards, loans, and merchant services, which may be easier to access with a dedicated business account.

If you choose to use a personal bank account for your sole proprietorship, keep meticulous records of your business transactions. This includes documenting income, expenses, and the purpose of each transaction. Good record-keeping will be crucial for tax reporting and financial management.

If your business grows or if you want to take advantage of the benefits of separating personal and business finances, it’s a good idea to consider opening a separate business bank account. Consult with a bank representative to understand the requirements and options available for business accounts, as well as any associated fees. It’s advisable to consult with an accountant or tax professional to ensure that you are handling your business finances correctly and in compliance with tax regulations.