Who is liable for a corporate credit card?

When you hand out company cards to employees, someone is responsible for every charge. Depending on how the account is set up, you, your business, or both may bear that responsibility. There’s more than one way to set up liability, and the wrong setup can expose your business to fraud, poor spending controls, and employee misuse.

What is business credit card liability?

Business credit card liability defines who is legally responsible for paying the balance on a business credit card. When you apply for a business credit card, the issuer assigns a liability structure that determines financial responsibility. This structure affects those who undergo a credit check, those whose credit is impacted, and those who must repay the charges made on the card.

Liability matters because it directly influences how much control you have over employee spending, how you enforce your expense policies, and how much risk your business takes on.

Three main types of liability are used in business card programs: individual, joint, and corporate. Each assigns responsibility differently when card payments are missed or charges are disputed.

Common liability concerns for businesses

Liability becomes a concern when assigned without clear controls or when no one fully understands who’s responsible for what. You might assume the business is covered, but without the right structure, you could be exposed to financial risk, legal issues, or employee confusion.

• Unauthorized employee spending: Employees who have access to company cards without clear spending limits or approval workflows may use the card for personal purchases. Even well-intentioned misuse, like covering a business expense outside policy, can lead to budget overruns and reporting issues.
• Lack of visibility into transactions: When multiple employees use business cards without centralized tracking, it becomes difficult to monitor balance transfers and spending, flag anomalies, or catch errors in real-time. This can delay month-end close, complicate company audits, and reduce your ability to spot risky behavior early.
• Credit risk to employees: In individual or joint liability setups, employees have to give a personal guarantee and are responsible for charges made on behalf of the business. If reimbursements are delayed or missed, this can hurt their personal credit and create tension in the workplace. It may also make it harder to get employees to buy in when issuing cards.
• Limited control over card usage: Some liability structures give more power to the card issuer than to the business owner when it comes to setting credit limits or managing user access. Without strong internal controls, this can lead to spending that does not align with your budget, policy, or compliance requirements.
• Legal and compliance exposure: If liability terms are not clearly documented and enforced, your business could be held responsible for disputes, chargebacks, or fraudulent charges. This creates legal exposure and increases non-compliance risk during audits or financial reviews.

Types of business credit card liability

Business credit card liability falls into three main types: individual, corporate, and joint liability. The key difference is who takes legal responsibility for repaying the charges—your employee, your business, or both.

Under individual liability, the employee must pay the credit card bill and seek reimbursement from the company. With joint liability, both your business and the employee share responsibility for the business credit card debt, meaning either party can be held accountable for repayment. In a corporate liability setup, your business assumes full responsibility for all charges, with the company receiving and paying the bill directly.

How liability affects internal financial controls

You use financial controls to manage how money is spent in your business. These include setting card limits, requiring approvals, tracking transactions, and making sure expenses follow policy. Controls help you prevent misuse, manage budgets, and ensure clean financial reporting.

Your liability structure directly affects how these controls work because it determines who has the authority to enforce them.

Card limit settings and approval flows

Card limit settings and approval flows help you control how employees use business cards. Card limits let you cap how much someone can spend, either per day, per transaction, or in total. Approval flows decide which purchases need sign-off before they go through.

These tools are key to protecting your budget and enforcing your spending policy. However, how well they work depends on who holds liability.

When your business is liable, you have full control. You can issue cards with fixed limits, block certain merchants, and set rules that require approvals for high-risk or high-value purchases. You decide who gets notified, who approves, and how fast things move. This gives you visibility and control before money leaves the account.

If personal liability sits with your employees, your ability to enforce those settings drops. The card holder often controls the limits. You may not see charges until after they happen. At that point, you rely on reimbursements and policy reminders instead of real-time controls.

Nearly 50% of companies still rely on manual approvals for business expenses, leading to delays and errors. Without control over card settings and approval flows, your financial controls weaken.

Ramp lets you automate approval flows based on team roles, departments, or spend thresholds. If a purchase exceeds the limit or falls outside an approved category, it automatically gets routed to the right person for approval. You can also lock or adjust card limits in real-time, which helps you prevent overspending without slowing down your team.

Enforcement of spending policies

Your spending policy sets the rules for how your team can use company money. It covers what they can buy, how much they can spend, and which vendors are approved. Enforcing that policy means making sure every purchase follows those rules.

If you can’t enforce your policy in real-time, you leave room for mistakes, overspending, or misuse. That’s where liability comes in.

When your business is liable for the charges, you can build those rules directly into your card program. You can block certain categories, limit vendor access, and set alerts for out-of-policy spending. You get to stop issues before they show up in your credit reports.

If liability sits with your employees, it’s harder to keep control. You must rely on them to follow the rules, accurately report their expenses, and request reimbursement. By the time you catch a policy violation, the money is already gone.

If you want clean books, faster closes, and fewer exceptions to chase, your liability structure needs to support policy enforcement at the source. Otherwise, you're stuck reacting after the fact.

Reconciliation and reporting implications

Reconciliation is how you match card transactions to receipts and accounting records. Reporting is how you organize that data to track spending, flag issues, and support audits. Both are essential for keeping your books clean and your close process on track.

Your liability structure plays a big role here. When your business is liable, you get full access to transaction data as it happens. You can reconcile charges quickly, code expenses accurately, and generate reports without chasing missing details.

If your employees are liable, you're stuck waiting. You depend on them to submit receipts, categorize transactions, and request reimbursement. That slows everything down and leaves you with incomplete data. Over 82% of CFOs reported that inaccurate financial data hindered strategic decision-making in their organizations. ​

Ramp connects directly to your ERP or accounting software and syncs transactions in real time. Every charge is automatically categorized and mapped based on your accounting rules. That means fewer manual adjustments, faster close cycles, and more reliable reports. You also get full visibility into who spent what without waiting on employee submissions.

Factors to consider when choosing a liability model

Not every liability model fits every business. The right choice depends on how your company is structured, how your team spends, and how much control you need.

1. The size and structure of your business. Start with how your company is set up. Card issuers may only offer individual liability if you are running a small business or operating as a sole proprietor. If you manage a larger or incorporated business, you are more likely to qualify for corporate liability, where your business takes full responsibility for the charges.
2. How many employees need cards. Individual liability might work if you are only giving cards to one or two employees. But as soon as you start issuing cards across departments or roles, the risk increases. You will need a model that gives you centralized oversight. Corporate liability makes it easier to issue cards, adjust limits, and monitor usage without relying on employees to manage the process themselves.
3. Your monthly spending and transaction volume. The more transactions you process, the harder it becomes to track spend and catch errors. If your team processes a high number of expenses, you need real-time visibility and automation. Corporate liability gives you direct access to transaction data. That helps you reconcile faster and keep reporting accurate.
4. The systems and tools you already use. If you use an ERP or expense management platform, you need a model that connects easily to those systems. Corporate liability works best with automated workflows. You can sync transactions, apply coding rules, and reduce manual work. Ramp integrates with accounting platforms like QuickBooks, NetSuite, and Xero, so you can manage liability and reporting from one system. With individual liability, your team collects receipts and follows up on submissions.
5. Your appetite for risk and compliance needs. If you operate in a regulated space, you need a liability model that supports enforcement. Corporate liability gives you the power to block vendors, restrict categories, and apply policy rules at the card level. You can catch out-of-policy spending before it hits your books. If you choose individual or joint liability, you will lose that control and rely on employees to follow the rules manually. That creates more room for mistakes.

Liability implications in cases of fraud or disputes

When a fraudulent charge appears, your liability model determines the steps you take and how fast you can resolve the issue.

If your business holds corporate liability, you can take immediate action. You can access the full transaction record and file a dispute directly with the credit card issuer. Your business finance team can gather documentation, meet deadlines, and track resolution without waiting on employees. This reduces the chance of missed chargeback windows or unrecovered funds.

If you use individual or joint liability, your employee is on the front line. They're the ones who have to recognize the credit card fraud, contact the issuer, and manage the dispute process. In some cases, they may even need to pay the charge before being reimbursed. This creates risk not just for them, but for your company, if the issue isn't flagged quickly or handled correctly.

These delays can cost you. Global card fraud losses have reached $33.83 billion in 2023, and commercial cards are increasingly targeted. If your employee misses a deadline or provides incomplete details, your business may not get that money back.

Disputes also affect your financial reporting. If a charge sits unresolved, it complicates reconciliation and may distort your monthly spending data. With corporate liability, you control the process and the outcome. With employee liability, you're left waiting, and that delay can create downstream issues across your books.

Choose the liability model that supports how your business spends

Your liability structure shapes how you manage risk, enforce policies, and close your books. The right model gives you control over how money moves, who’s responsible, and how fast you can act when something goes wrong.

If your team handles a high volume of transactions, corporate liability gives you the visibility and tools to manage spend at scale. If card use is limited or tied to a few individuals, individual or joint liability may be easier to manage if the risks are clear and accounted for.

Ramp’s platform is designed to help you manage liability proactively. You can issue corporate cards with preset limits, restrict vendor or category usage, and automatically flag out-of-policy charges. Transactions sync directly with your ERP, and security features like auto-locking cards and real-time alerts help you act quickly when something goes wrong. And because Ramp doesn’t require personal credit checks or founder guarantees, your team stays protected.

Before you issue another card, make sure your liability setup aligns with how your business actually spends, not just how the account was opened. That one choice impacts everything that follows, from reconciliation to fraud recovery.