Choosing the best small business bank account is critical. A business checking account not only allows you to spend and keep money, but it also allows you to segregate your personal and company assets, collect money via merchant services, and, if you create the appropriate connection, may help you acquire a business loan.
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Why Should You Open a Business Bank Account?
Every company, particularly limited liability organisations (LLCs) and corporations, need a bank account.
A business checking account serves to avoid breaching the corporate veil, therefore protecting personal assets from business loss and responsibility. If you do not have a business bank account, you may be held personally accountable if someone comes after your firm, i.e. sues it.
You don’t want to worry about losing your house and automobiles, as well as having to sell your IRA and other retirement savings. As a result, open a business bank account for your company.
How to Open a Commercial Bank Account
Finding the correct bank for your purposes, presenting the necessary business papers, and lastly applying for and financing the account are all necessary steps in opening a business bank account.
Please follow these steps to guarantee you don’t encounter any issues and may open a business checking account.
How to Open a Business Bank Account
Please provide documentation. When you want to create a business checking account, you must give paperwork that proves the name and general type of your company, your incorporation papers, DBA certificate if applicable, and your Employer Identification Number (EIN)/Social Security Number.
Demonstrate your identification. You will also need two kinds of identification to prove that you are who you claim you are. You may need your state-issued driver’s licence as well as your US passport.
Perform your due diligence. You should investigate which bank and which business checking account at that bank is best for your specific firm. In most cases, you’ll want to learn about the finest banks for small companies since that’s what a beginner entrepreneur is—a small company owner.
Apply for a company checking account in writing. Once you’ve found the correct bank, you may apply for a business checking account in person or online. Other accounts you may wish to open, some of which may be helpful, such as a small business savings account, which may minimise some of your small business checking account costs. In order to save as much money as possible, consult with your banker.
Open a business checking account. After you’ve completed the paperwork, signed the opening agreement and signature card, you’ll need to fund the account with an initial deposit in most situations. The criteria of various banks varies. Have in mind that some banks may want you to keep a particular amount of cash in your business checking account to avoid incurring a monthly charge; check with your bank for more information.
Set up a merchant account. After you’ve filled the account, link your merchant account to the bank account so that when you process credit card transactions, the funds are immediately deposited into your company bank account.
Use your company checking account only for business needs. Now that you’ve finished the procedure of creating a company checking account, it’s critical that you never use this account to pay for personal expenses in the future. To prevent IRS fines and other liability difficulties, keep this account separate.