web analytics
BOOK A FREE CONSULTATION

Opening a Business Bank Account

Opening a Business Bank Account

Business bank account is the best way to keep records of finance and business transactions. Business bank account helps us to easily track the expenses and manage employee payments. We can receive, deposit and withdraw payments whenever we like following a planned budget. For a better experience of accounting practice we need to separate business account from personal account. In future it will help to ease out and avoid many difficulties. Also while developing a business plan it is important to consider accounting and finance related issues.

When we decide to open a business bank account, we should explore the financial institutions in the respective areas, nearby and explore their specialty by consulting with each of them. Some banks are small but good business specialists, others provide property loans. Therefore if we want a safe and stable business banking, we can take recommendation from professionals or can consult accountants before reaching to a bank.

Nowadays, business bank account holding customers can find cash and credit management services along with account check. With time customers get to know about the expertise and brilliance of the concerned institution. Often it comes up that the customers who separates their personal and professional accounts, enjoy the facilities like balance transfer credit card, consistent line of credit etc. Sometimes if the minimum monthly account balance is maintained, some business accounts waive off the monthly fees for the business owners.

A better businessman makes a checklist of all the necessities of the business and ensures that the bank he/she selects can meet with them, and grow in future as the business develops furthermore. A businessman should also get his office registered with HMRC before taking up any business related activity. To protect a new business from the trademark infringement, a person should pay the registration fee to file a business name and apply for a trademark protection.

What you need to open a business or commercial account

Now to proceed further we have to know that what we need to provide as documents or proof for opening a business account. The steps are easy and divided by personal identification and professional documentation depending on the type of business.

Principal business account operators will have to provide the proof of identity for their own business and also if they add any authorized person or nominees to their account. For most companies we need to identify a minimum of two company officials if two or more directors exist, but in exceptional cases if we find one appointed company official then we must identify him/her. Now if we come down to subject of individuals we know that a principal controller or a beneficial owner is the person who is entitled to control the business directly or indirectly, but they are not necessarily the account operator of that business.

There are a few more concerns before we go for the documentation we need to provide for specific regional citizens. Every bank where the business account is going to be opened, it needs the legal evidence of the proper formation of the business according to the state law. A state endorsed copy of the formation document needs to be provided to the bank. It is to be remembered that some states require business licenses for specific industries. People often provide ‘DBA(Do business as)’ papers because they register the business name as that. But these papers are the certificates of business authority.

Businesses are legal entities of state, is a subject to federal taxation. Therefore all banks who are participating in businesses required to obtain employer identification number for each account. Except these a bank application is to be filled up with the official name and mailing address of the company. The name and addresses of the authorized officers will be there. A formal signature card also needs to be submitted which will help the bank to compare and recognize any forge signature which will eventually keep the account safe.

Documents you need to provide

  • For UK, EEA or Swiss National
  • B. For Non-UK Residents

Now for UK, EEA or Swiss national bank accounts original documents of a valid passport or UK driving license is enough but no photocopies will be accepted. Also in other cases approved UK provisional driving license, approved EU state national ID Photo card, firearms certificate or shotgun licenses are applicable. The documents must be in date, undamaged and machine readable, no handwritten objects will be entertained.

If the concerned person is not in possession of any photogenic identity proof, he/she can provide non-photogenic id which will include two address proofs. Non photogenic identities also includes:-

  • HMRC Documentation i.e. (Tax notification/Statement of account/NI contribution bill/PAYE Coding notice/Self-assessment) valid for the current tax year or issued in last three months
  • Notification letter from local authority or benefit agency with the confirmation of rights within the last one year.

Now if the nationality of the person is outside UK, EEA or Switzerland then he/she needs a valid passport with the current visa with at least six months left in it, also a biometric residence permit is enough to apply for a business bank account.

For both the cases if all provided documents, names and addresses are not approved by the authority or not verified electronically, other applicable address proofs can be submitted or accepted. Those are as follows:-

  • Credit card statement dated within last three months.
  • Mortgage statement form a dependable lender dated within last twelve months.
  • Current tenancy agreement from a local council.1
  • Life insurance policy dated within last three months.
  • Utility bill dated within last three months.
  • Telephone, cable, tv bill dated within last three months.
  • Motor insurance certificate valid within the current year.
Documents required as per business type
  • Sole traders
  • Partnerships
  • Limited Liability Partnership
  • Limited Companies

Now we will discuss about the documents required for different significant business types.

Sole Traders

Sole Traders

If someone is a sole trader of a start-up, new or existing business he/she needs to provide anyone of the following documents -

  • Business premises rates bill dated within last twelve months.
  • An invoice from a supplier dated within last three months.
  • HMRC Correspondence dated within last twelve months.
  • A utility bill dated within last three months.
  • An existing business bank statement dated within last three months.
  • A letter addressing to metro bank from an accountant acting on behalf of your business.

Partnerships:-

If someone is in a limited partnership that is new, existing or start-up he/she needs to provide anyone of the following documents -

  • An utility bill dated within last three months.
  • An existing business bank statement dated within last three months.
  • An existing business bank statement dated within last three months.
  • A letter addressing to metro bank from an accountant acting on behalf of your business.
  • Business premises rates bill dated within last twelve months.
  • An invoice from a supplier dated within last three months.

In both the upper cases, if the applicant fails to provide any of the documents the authority will visit the business premises to confirm the details.

Limited Liability Partnership:-

If the concerned person is a limited liability partnership of a new or start-up business within the first twelve months of trading, the authority will carry out a credit reference agency search with the person’s permission. If the results are satisfactory the person doesn’t need to provide any documents otherwise he/she needs to provide the following documents -

  • A registered members list to clarify the details of the members and their individual shareholding within the company.
  • An incorporation certificate.

Limited Companies:-

If the concerned person is a limited company of a new or start-up business within the first twelve months of trading, the authority will carry out a credit reference agency search with the person’s agreement. If the results are satisfactory the person doesn’t need to provide any documents otherwise he/she needs to provide the following documents -

  • If the limited company is using a ‘trading as’ name, a copy of the company board resolution signed by two directors and the appointed company secretary or by the sole director authorizing the use of it.
  • An incorporation certificate.

In case of existing business we follow the same steps.

Setting up a business bank account for Startup or New Business

For a business start-up you need to float a unique idea to be successful. But to legitimize your idea and to make a real business, opening a business bank account is a vital consideration for you. It doesn’t not only just serve validate your new venture plan but also play an important role for your taxes. Moreover, making it tougher to keep record of what to inform as income and expenses, by not segmenting business and personal finances, you could be costing your business, money rather yourself by not taking benefits to items that can be allotted as write-offs.

That means, your business account will allow you to keep track of all your expenditures, manage your employees’ payment, and plan your budget more precisely. Therefore, it’s very important to know how a business bank account can be created or what exact steps to follow. First of all you need to select what kind of account you need

It is vary essential to understand what kind of bank account is needed to avoid financial glitch. Creating one bank account for all purposes likes income, payroll and taxes is difficult to tackle. It is advisable to open separate bank accounts for separate financial purpose which may sense depending on the depth of your ventures. You should take advice of any financial consultant for proficient proposals before going towards bank.

Choosing the right bank for your business

While you may have a particular preference for your personal bank, there can be an advanced account servicing alternative out there that identifies your business and can give profitable expertise, particularly in the event that you require a credit extension and want a balance transfer credit card or require cash management. It might be perfect to begin the correlation procedure with the bank you already work with, however don't check out different choices that might be a superior fit for the business you're in or that offer lower business managing an account costs if your financial plan is lean.

Likewise, you should be careful about the credit unions who may not offers a business checking accounts. Business accounts of other banks may remunerate entrepreneurs by forgoing month to month charges if the base month to month account balance is maintained. Therefore, make an agenda with all your business needs, and ensure the bank you choose can meet them now and enjoy growth with you as your business grows.

There are few banks who offer you online facilities to open business bank account that means by sitting in home a person can create the A few banks will give you a chance to open a business ledger online without visiting the bank face to face. Ventures that will stereotypically still be needed to open an account in the bank incorporate organizations giving cash administrations, telemarketing organizations, and gambling ventures.

Since you've picked your accounts and bank to work with, and opened your business ledger, by setting up a merchant account enable your business to receive payments. A credit card merchant account is a need to acknowledge MasterCard payment, alongside your financial balance and an approach to process transactions.

Online payments frameworks might be an appealing decision if your business expects a huge volume of e-commerce trades. You can also download the application Square Register for in store purchases through which you can not only enjoy card payments service, but also build sales reports and supervise purchasing trends for better influence.

  • Taxes you owe
  • Funds coming into the business
  • Business expenses, from electricity and technology, to dinner meetings
  • Donations made on behalf of the business
  • Payroll costs

You and your bookkeeper will be better arranged to precisely present your assessments and abstain from being inspected by the IRS- - one less business worry to help you effectively dispatch and keep up your endeavor.

What you need to open a business or commercial account

Documentation necessities for a business financial balance fluctuate depending upon the sort of business. Sole proprietors are viewed as more like a shopper, so required reports ought to be minimal like tax ID and government managed savings number are for the most part all you require. However, you will require to submit more documents for in case of corporations, including articles of incorporation and a declaration of good remaining with the state.

In the event that you are utilizing a name other than your own like doing business as which, you have to enlist that name with the state and submit the form to the bank. You may likewise need to give confirmation of address so that bill can be received at your address or any state communication address to your company.

By opening a business financial balance, you can give your private venture a firm establishment as it succeeds and develops. In the event that you are uncertain of what sort of account you require or what's required to open an account, take advice from any financial expert in your general vicinity.

How long does it take to open an account?

A business bank account may take one- two weeks maximum. A sole dealer account is quite straightforward, however the banks need to do their typical hunts previously they will finish any formalities.

But in case if time is essential, at that point one should choose that particular bank where he or she bank personally. Because in this case, bank’s investigation will be minor as they already have your details which will help them to speed up the official process for opening a business bank account. However, you need to show your fresh ID to open it.

Share this post


Sign up to our newsletter

Tax news for contractors freelancers and small businesses.