Business Bank Account

Business Bank Account

Business Bank Account Requirements

Keeping your business money separate from personal monies is a legal requirement for most business forms and a smart practice for proprietors and partnerships. As you go through the steps of getting your business established and your accounting systems in order, opening a business checking account is inevitable. You may also need or want a business savings, payroll or merchant account. All of these are possible with a simple set of credentials that legal businesses should be able to provide.

Tax Identification Number

Regardless of your form of business or state, banks always need your tax identification number to record who owns and operates the account. For a sole proprietor, this can be either a Social Security number or a business Tax Identification Number. For other forms of business, you can use either a Tax Identification Number or an Employer Identification Number issued by the Internal Revenue Service using Forms SS-4 or SS-5. Additionally, if you have multiple signers or authorized agents on your account, the bank will require the Social Security numbers of all authorized parties for federal security and compliance purposes.

Legal Documents

To have a business account, you have to show you have a business. For corporations, limited liability companies and limited liability partnerships, proof consists of your articles of incorporation or other organization documents filed with your state as well as the letter of approval from your state. General partnerships must show either a partnership agreement or proof of state registration. Sole proprietorships must show either proof of a legal business name issued from their county or a business license showing the business name and owner.
Business Bank Account


Requirements can vary by state and bank. Some banks and states allow for opening accounts online or by phone if you have all the information handy, other jurisdictions and banks may be stricter and require in-person applications. Avoid complexities by checking with your bank and going in if required with all your documents and signers for an in-person application.

Opening Deposit

Every account has to have something in it. Banks offer opening deposit options from $100 to many thousands of dollars. Accounts may have no fees or pay interest in exchange for larger resting balances. You will also find differences in the minimums required for payroll and merchant accounts, which usually require higher resting balances as compared to small business checking accounts. Study your bank's account offerings to choose which makes sense for your business. Consult a banking representative if you need help.

Business Bank AccountHow to Apply for a Business Bank Account

Whether your business is brand new or has been in operation for many years, a separate checking and savings account is important. As a business owner, you need to keep careful track of every dollar the business takes in and every dollar it pays out, and it can be difficult to gather that information if you comingle your personal and business funds. Fortunately, setting up a bank account is one of the easiest things you will do as a business owner.

Step 1
Check your local newspaper for business account specials run by local banks. Many commercial banks are eager to attract business customers, and they are often willing to provide some attractive incentives to do so. Depending on the bank, you might be able to get a cash bonus, a free credit card merchant account and more.

Step 2
Contact the bank where you have your personal accounts if you are unable to find any suitable specials. Keeping your personal and business accounts in the same institution is more convenient than using two different banks. In addition, many banks offer discounts on fees and expenses for customers who keep a sufficient balance in their accounts, and your business account might qualify under those balance requirements.
Step 3
Business Bank AccountCheck the terms and conditions of each business account the bank offers. Consider the balance requirements of each account, as well as any charges and expenses. Keeping your expenses low will give you more money to invest in your business. If your own bank does not offer a suitable account, it will be worth your while to shop around for a better deal.

Step 4
Complete the business bank account application carefully. If your business uses an Employer Identification Number, or EIN, be sure to put it on the application. If you use your personal Social Security number for your business and pass the income through to your personal tax return, use your SSN instead.

Things Needed
  • Newspaper
  • Bank account application
  • Employer Identification or Social Security Number

No comments:

Post a Comment

Please don't spam. Spam comments are not approved