If you’re a business owner just starting out, you will sooner or later realize that you need to open a business banking account. This is especially true if your business name is different from your legal name. Under no circumstance will the bank take a check written out to your business name without a business account. Therefore, a business banking account is an absolute priority to new business owners.
As a sole proprietor, this is where filing for a business entity such as Fictitious Name Statement or DBA, comes in. When you go to the bank to set up a business account, you will need the certified copy of your DBA as the legal document to prove that you are doing business legally in another name and open an account in that name. If you are forming or have already formed another legal entity such as a Limited Liability Company or Corporation, then you will need those certified documents, known as Articles of Organization, or Articles of Incorporation, respectively, to open a business banking account for that type of business entity.
Word of advice: separate your business banking account and personal banking account. In theory, it looks like it would be easier, but come tax time you or your accountant will have an easier time going through your expenses. Moreover, having a business account helps you better organize your business finances and begin to build a business credit history.
What You Need to Open an Account:
As for requirements, what you will need in order to open a business banking account will pretty much be the same for all banking institutions. Depending on what type of business entity you hold—a DBA, LLC, Corporation, etc.—you should have those documents and one to two forms of identification.
Finally, if you have employees, a business partner or other facets, you will also need a Federal Employer Identification Number (FEIN) also known as a Tax Identification Number (TIN).
Before you go, make sure that you have done your homework to see what types of banks and business accounts are out there before opening an account. For example, some business banking accounts offer free checking, waive monthly maintenance fees or offer attractive introductory interest rates.
Also, be prepared to discuss your short and long-term business plans. The bank wants to get to know you and have a full understanding if your business. It is important to establish a good relationship with your bank, especially with the manager or the teller manager. Having a good rapport with the bank will give you some small incentives such as avoiding getting your checks put on hold or bank employees calling other institutions to verify checks. Plus, it’s always nice to have a new acquaintance.
Above all, it is imperative that you have the correct legal documents to open an account and that you’ve done your research to see which bank and plan is right for you and your business. There is plenty of help out there to guide you; including Signature Filing. We’re dedicated to giving people the most reliable business information, as future and current entrepreneurs embark on their business ventures. I wish you the best of luck on your pursuits.