What are the Requirements to Open a Business Bank Account for Your Startup?

Are you an entrepreneur planning on opening a business bank account? As an individual, it is important that you understand that as an entity, you are different from your business. You as an individual have the right to sue and be sued and so does your business because your business is a legal entity in law.

So as an individual who owns a registered business, you should operate a bank account that is different from your business. That is to say that your individual personal bank account should be different from your business bank account.

What do you need to open a bank account for a small business? Can I open a business bank account with ein only?

While seeking to open a business bank account, you should also understand that the documents and requirements required to open a business bank account are not exactly the same with the documents and requirements for opening an individual bank account.

Opening a business bank account requires a few more documents than opening an individual bank account. Aside from that, certain requirements must also be met.

Some of the documents and requirements that should be met before a business bank account can be opened are:

  1. Tax Identification Number
  2. Business Licenses
  3. Personal Identification
  4. Articles of Incorporation
  5. Proof of Address
  6. Written Meeting Resolution.
  7. Make a Deposit

We shall now go further to explain these documents and requirements.

  1. Tax Identification Number

To open a business bank account, a tax identification number is required. The tax identification number can also be called an employer identification number.

This requirement is essential in opening a business bank account as it shows if the business is a responsible citizen. The tax identification number is a very key tool in measuring the level of tax compliance by the business.

This document is also used in the management and payment of the employees of the business. The business should endeavor to take this document along on its appointment with its bankers.

  1. Business Licenses

Before a business can operate, it needs to get the required and applicable business license. Before a business bank account can be opened, a business license is required. No matter the type of business, a sole proprietorship or a Limited Liability Company.

The presented business license should also be a current and an updated document.

  1. Personal Identification

Before a bank can open a business account for a customer, the bank requires the personal identification of the business promoter.

The acceptable form of personal identification is a driver’s license and a passport. The acceptable personal documents should also be able to corroborate the identity of the individual or individuals who are opening the business bank account. The personal identification document must also be a picture document

  1. Articles of Incorporation

The article of incorporation is an important document in the formation of a business. The article of incorporation is, therefore, an important document required by a bank before a business bank account can be opened.

The articles of incorporation are usually filed with the state. This requirement is applicable to all Limited Liability Companies (LLCs) and Limited Partnerships (LPs).

  1. Proof of Address

A proof of address is also required to open a business bank account. A proof of address is any document that proves the address of the business as stated. An acceptable proof of address document is a utility bill or other document that bears the address of the business.

  1. Written Meeting Resolution

Another required document to open a business bank account is a written meeting resolution or the minutes of the meeting where it was resolved to open the bank account.

The minutes should also state clearly that the person or group of persons who are coming forward to open the business bank account have been authorized to do so for the business. This document is most required when the business is owned by more than one person.

  1. Make a Deposit

When all the required documents have been provided, in other to open the business bank account, most banks would require that the business make a required minimum deposit into the business bank account.

This initial deposit can be made by cash or cheque. The requirement to make a deposit is usually the final requirement in the business bank account opening process. For most banks, this initial or first deposit is required to activate the new business bank account.

Conclusion

As a business, it is important to operate a business bank account. The above-discussed documents and requirements are required to open a business account.

However, the business should approach the bank in which it wishes to open a bank account to understand how the bank would want the documents to be presented.

In putting together these documents and requirements the individual or business should also seek the advice of an attorney. While opening a business bank account is important it is also as important to choose the right bank to open the business account with.

Also, ensure that the documents which you have presented for the business account opening are legal and legitimate documents. Make sure that the bank which you have decided to open an account with can meet the financial needs of your business.