Irrespective of the size of your business, it is important you open a business bank account for your business. This will be an account separate from your account.
This business bank account can be opened online and in person, that is you going directly to the bank. The processes are the same; you just have to decide on the one that is convenient for you.
There are a lot of reasons why you should open a business bank account, you will find out some of these reasons in this article. And also the process of opening a bank account for your business is easy so you do not have to be discouraged.
Once you have the necessary documents which are listed below, you can go ahead to open a bank account for your business.
Why You Need to Open a Business Bank Account
You might be feeling reluctant on opening a business bank account, but you should not, this is because there are a lot of good reasons why you need to open a business bank account.
- A business bank account will enable you to get advanced business banking services.
- Opening a business bank account will help you to keep track of your tax deduction and all your purchases.
- A business bank account will also help to separate your business and personal finances. This in turn helps you to protect personal assets.
- Having a business account will help to build business credit under your business name and this will be separate from your personal credit history.
- Opening a business account also helps your business to maintain a professional appearance.
These and a lot more are some of the reasons you need to open a business bank account.
How to Open a Business Bank Account Online/Offline
To save time, you may decide to open a business bank account online, this is very much possible but note that not all banks allow it. Also, note that the type of business you operate will determine if you can open an online business bank account.
For example, if you run a partnership business, the bank will need you and the other partners to visit the bank.
Some banks include the online opening of accounts among their services; you can as well work with such banks. However, the process of opening an account online depends on the bank. To open an online bank account;
- You have to go to that bank’s website and search for details on how to open an account online.
- Then you choose the type of account you want to open.
- Every bank has a required amount of money that needs to be deposited when you want to open an account. You have to ensure you have the required find.
- You have to provide the documents needed by the bank and also provide the needed information. This varies; it depends on the type of business you are operating.
- Then you have to sign electronically.
The process of opening an account online and offline is the same. The difference is that to open an account online, you do not need to visit the bank.
But when you want to open an account in person; there will be a need to visit the bank. Also, the required documents for opening a bank account are the same both online and in person.
Documents Needed to Open a Business Bank Account
Opening a bank account for your business is very easy. There are some steps involved, first, you need to pick a bank you want to bank with.
And when you provide the necessary documents needed by the bank. Below are some of the documents required by the bank?
- EIN or SSN
- Personal identification
- Ownership agreement
- Business license
- Business formation document
- Certificate of an assumed name
- Monthly credit card revenue
1. EIN or SSN
You will need to provide your Employer Identification Number or your Social Security Number to prove your business identity.
2. Personal Identification
The bank you apply to will require you to provide a means of identification. It could be your state-issued identification, your passport, or your driver’s license.
3. Ownership Agreement
This is needed when you run a partnership or ownership cooperation. It is expected that you and your partners create a partnership agreement that will outline each other rights and responsibilities.
4. Business License
You need a business license because it is what you have been authorized to operate that business.
5. Business Formation Document
The bank will ask for your business formation document. This document contains information about your business, its management, structure, and how your business operates.
6. Certificate of Assumed Name
This is needed when the name you use to advertise your business is different from your business legal name. You will therefore need a certificate of an assumed name, known as doing-business-name.
7. Monthly Credit Card Revenue
If you are interested in opening a merchant service account to process debit and credit card transactions, then you will need to provide details of your average monthly credit card revenue to your bank.