What do you need to open a business bank account?


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As a small business owner, it is important to separate your business and personal banking operations so that you can monitor the profitability of your business and avoid mixing up transactions. With a corporate bank account, you can help protect yourself and your business. Before opening one, make sure you understand what you need to start making deposits and get the most out of your account.

In this article, you will learn what you need to open a business bank account and why having one is crucial for your business.

How to open a professional bank account?

Opening a checking account or a business savings account can be simple and straightforward when you know what information you need to get started.

1. EIN number

The first thing you’ll need is an Employer ID number – also known as an EIN, FEIN, or tax ID number. The IRS issues and manages your EIN. If you haven’t applied for a tax ID number, you can still open a business bank account with your personal social security number.

Depending on your type of business, you may not need to apply for an EIN. A individual business without employees usually does not need it. An incorporated business (LLC) may need an EIN, depending on whether or not it has employees. If you are still unsure whether your business needs an EIN, refer to this IRS.gov checklist and seek professional advice.

2. Personal and professional identification

Opening a business bank account requires identification for you and your business. Examples include your state-issued driver’s license or passport, business license, or partnership agreements.

Your business may also need to provide additional equipment.

● Sole owner: You will need to present your social security number. If your company has a DBA (doing business as) or aliases, you will need to provide a certificate showing the other name (s).

● SARL: You may need to present the EIN and company registration. If you are the sole owner, your name must be entered as such.

● Limited liability company: You will need to provide an agreement that lists the names of all partners as well as the name of the company.

Prepare your business documents when you go to open a bank account. If you have filed any documents or licenses at the state level, you may need to bring them as well. When talking to a corporate banker, be sure to ask what documents the financial institution needs to open a business checking account.

3. Initial deposit

Once you have established your personal and business identity, you may need to make an initial deposit to open your account. Initial deposits and minimum balances vary by bank and account type.

Select a business bank account with an initial deposit amount and a manageable minimum daily balance for your business. Work with your local investment banker to identify the amount of your initial deposit. Also inquire about offers or limited time offers; many banks forgo initial deposits or contribute a monetary offer to new eligible accounts.

Opening a professional bank account for your business has many advantages, both personally and professionally.

● Separate finances: One of the benefits of opening a business bank account is keeping your personal and business finances separate. This can be important for taxes, and it can help you avoid confusing business with personal expenses.

● Helps maintain liability protection: If you operate a SARL or a business, it is important to have a business bank account. Having one can help you maintain liability protection, potentially guaranteeing you payments in any situation where you may be held liable. Business owners should speak with a lawyer to understand what protection is available (if any) and what action to take.

● Help streamline the tax process: Having a professional bank account with all your entries and exits can help when you file taxes. All of your business expenses will be in one place and you will be able to use the account to pay all customers, clients and suppliers. Business owners should speak to a tax professional for more information.

● Establishes business credit: A business must also establish credit and setting up a bank account is one way to do this. If you are considering taking out a loan or working with a vendor, having a business credit history can be helpful. To establish a credit history and gain access to capital, you may also consider applying for a business credit card.

The process of opening a bank account

Once you have all the documents you need, opening a business bank account can be straightforward.

When you are ready to open your business bank account, you can open a online account or stop at a branch near you. It may be helpful to meet with an investment banker to determine the type of account you need: business verification, savings or one merchant service account.

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About Wanda Reilly

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