After starting a business, one of the first steps done by all entrepreneurs is to open a bank account in the company’s name. Having a bank account in the name of the company helps you to conduct commercial transactions and establishes your business’s credibility in the marketplace.
Business bank accounts allow you to keep track of your business money and keep them distinct from your personal finances. It takes more work to open a corporate bank account than it does to open a personal one. Documents must be gathered, names must be selected, and licenses must be obtained. Learn why you should create a business bank account and how to go about doing so.
Benefits of Opening a Business Bank Account
Setting up a separate business bank account is an important part of running any business. Even if you just have one personal bank account, your business will almost certainly require numerous accounts. Most corporate bank accounts provide privileges and perks that personal bank accounts do not. Here are four reasons why a company bank account is necessary.
Your business finances are kept separate from your personal cash in a business bank account. A corporate bank account has the advantage of limiting your personal responsibility and allowing clients to pay your firm directly, establishing a more professional relationship. In addition, the bank may provide you a line of credit as well as a business credit card to help you establish a credit history.
Types of Business Bank Accounts
There are mainly 3 types of business bank accounts that you can choose from:
- Business checking account: For regular business transactions
- Company savings account: For saving money and earning interest
- Merchant Service Account: For accepting credit card payments
Documents Required to Open a Business Bank Account
Before you actually get to opening a business bank account, you need to prepare the following documents to establish your identity and legitimacy of your business.
- Articles of Association
- Business Licenses
- Employer Identification Number (EIN)
- ‘Doing Business As’ Certificate
- Photo Identification Documents
Can You Open a Business Bank Account Online?
Yes, many banks have made it possible to create a business bank account online by digitizing the application procedure. Remember that you’ll still need to present all of the required paperwork and identifications if you apply in person. But some banks might not offer the option of opening a business bank account online for reasons like reducing the risk of identity theft or the nature of your business.