Your New Business: The Importance of Opening a Bank Account

When launching a new business, you need a safe and secure means for managing your finances, and the easiest way to get started is with business bank accounts – including business checking and business savings. As a new business owner, why should you open a business account and how do you go about opening one?

Why Open a Business Banking Account

Look Professional

You’ll be able to write checks or make electronic payments to vendors using your business name, and your customers’ payment statements will show your business name rather than your personal information.

Liability Protection

In the event that your business is sued, having a business account means that your personal funds are separate.

Allow Multiple Users

If you’d like your partners or employees to have account access, having a business account keeps your personal account private.

Accept Credit Cards

A personal bank account won’t allow for credit and debit payments to be received – you need a business account for that. An inability to take card payments may appear unprofessional and you could lose customers due to the inconvenience.

Easier Tax Filing

Avoid problems with the IRS – having a separate business account makes it much easier to track income and expenses.

How to Open a Business Banking Account

Here are a few things, among others, you may need in order to open a new business bank account:

Personal Identification

You’ll need legal photo identification such as a state driver’s license or passport.

Employer Identification Number (EIN) or Social Security Number

Most banks want you to have an Employer Identification Number (EIN) in order to open a business banking account – with a valid Social Security Number, you can get an EIN here through the SocialSecurity Administration’s website. Some banks, however, will allow a sole proprietor to open a business account with only a Social Security number.

Business Formation Documents

Your bank will need to see your business formation documents – such as articles of organization for a Limited Liability Corporation (LLC) or articles of incorporation for a corporation.

Business Licenses

Business licensing requirements vary based on location, so do your research – but your bank will need to know that your business has the appropriate credentials to operate.

Doing Business As (DBA) Certificate

If the publicly known name of your business differs from its legal name, you’ll need to provide a certificate of assumed name to your bank.

Sources:

https://www.fool.com/the-ascent/small-business/articles/what-do-i-need-to-open-a-business-bank-account/
https://www.businessnewsdaily.com/6477-business-bank-account-documentation.html