Find out the requirements for opening a business bank account.
Opening a business bank account is a significant step in formalizing your new venture. Even if you’ve only been in business a short time, you may have observed that excessive fees and low interest rates are very typical, leading you to reevaluate your options.
The specifics of opening a commercial bank account are slightly more extensive than those of opening a personal bank account, but they are still manageable. We’ll go through everything you need to know.
How to open a Bank Account for a Company in UK
Your company can advance significantly with the correct business bank account. Here is how you do it:
Collect your paperwork: Most banks demand the same paperwork for applications, which we’ll go through in more detail below. The process will go much more quickly if you collect and arrange these in advance in a beautiful folder.
Think about your needs: Not all of the capabilities that small business banks provide are necessary. You won’t have to bother about opening a merchant services account, for instance, if you don’t frequently accept credit card payments.
Think about your desires What matters most to you? For instance, what matters more to you earning a respectable return rate on your savings account or avoiding fees? Your search will be made easier by this.
Compare banks: Make a list of potential lenders and note the characteristics that matter to you, such as minimum balance requirements, compatibility with accounting software you already use, potential business loans or business credit cards you might later apply for, and other things.
Look at your top pick more thoroughly: Get a list of all fees and policies for the business account if you can, then read over them and make any necessary notes as you go. This will give you a better understanding of any potential charges or issues you might encounter later.
Applying for a business bank account may be done online, in person, or over the phone, depending on the bank. The documentation you acquired before must be provided, and depending on the bank, more information may be requested as well.
Make a deposit to open the account, then begin using it: Transfer your company’s funds to your new account as soon as your application for an account has been authorized.
Shut off your previous company bank account: Make sure you get in touch with the bank to terminate any previous business bank accounts you may have used. You won’t unintentionally incur any additional expenses this way, and you’ll also avoid potential fraud schemes.
Requisites for opening a business bank account in UK
If you’ve opened a personal bank account, you are aware of how simple the process is. A little more information is needed to open a business bank account, but in most cases, you should already have it on hand.
Banks must confirm that you are a real person who is qualified to open an account. Your personal information and the information of any additional business owners will be requested.
You may be required to submit the following details:
- Name and birthdate
- Constitutional status
- Social Security Number Contact information
- A copy of any government-issued identification, such as a passport or driver’s license
Organizational Data and Documents
The bank will want to make sure that you are a real person in addition to making sure your business is legitimate. Depending on the type of business structure you’re employing, such as an LLC or sole proprietorship, some of the documents may be necessary. These specifications could include:
- Company name and any additional DBA (“doing business as”) names that are registered
- Business permits
- Documents for business registration and business establishment, such as LLC articles of organization
- Operating Agreements for Businesses
- Organizational ownership contracts
Although not every company will have these records, if yours does, you’ll need them to open a business bank account. For instance, sole proprietors will not have firm establishment documentation.
Organizational Identification Number
For your company, an Employee Identification Number (EIN) functions similarly to a Social Security Number. You utilize it when corresponding with the IRS or when dealing with issues pertaining to business finances, such as setting up a business bank account. You may quickly apply for a free EIN online through the IRS.
Generally speaking, you don’t require an EIN if you operate your business as a sole owner. But, having one will prevent you from disclosing your personal Social Security number when conducting business.
Minimum Bank Deposit
To open a brand-new business bank account, some banks demand a minimal deposit. Find out in advance if this is necessary, and if it is, make sure you have the money on hand to send and begin the process. Remember that the minimum monthly amount required to avoid paying any maintenance fees may or may not be the same as the minimum opening deposit.