How Do I Open a Bank Account for a Limited Company?

Investigate the process of creating financial accounts for this sort of corporate entity to learn how to create a limited company bank account.

Investigate the process of creating financial accounts for this sort of corporate entity to learn how to create a limited company bank account. Private limited companies are popular in both India and the United Kingdom, but in order to conduct business in the United States, these companies must create a U.S. account. Sole proprietors may combine their company and personal funds, while limited corporations must have separate, specialised business bank accounts. This is due to the fact that a limited corporation is legally distinct from its directors and stockholders. The IRS and other authorities must be able to track its funds.

The Procedure for Opening a Business Account

If you have engaged an accountant for your limited business, he or she may open an account for you. You may also accomplish this on your own by signing up on your bank’s website or going to a branch in person. If you opt to work with a bank where you already have personal accounts, the procedure will be a lot easier. You will need to provide the following information:

All executives’ names and contact information

If you’ve been at your present location for less than three years, you’ll need a registered business address as well as a personal address.

Information about your current bank account

The birthdate

Nationality and residency status

The name of your limited liability corporation

Your firm’s registration number

The amount of transactions you anticipate processing every month

Borrowing requirements expected

Your business incorporation paperwork

Your driver’s licence or passport

Selecting a Bank

Although it is quite simple to register a bank account for your company, you should carefully choose the bank to start your account with. Obviously, the simplest and most convenient choice is to use your own bank. However, if your firm has numerous directors, each of whom uses a different bank, this may not be the greatest solution. Your bank may be excellent for personal banking but not so much for corporate banking. You must use your business account to:

Director salaries are paid.

Client payments should be received.

Dividends are paid to shareholders.

Pay your taxes and fees on a monthly and yearly basis.

Personal costs may be claimed.

Set up direct debits for your phone and electricity bills.

Consider the following factors while selecting a bank:

What charges and fees are levied on business accounts?

Is it possible to get recommendations and testimonials from delighted customers?

If phone and internet banking are available, and if there are any costs connected with these services.

Whether or whether you will be paid interest on your debt.

Because the bank will need to verify the identities and qualifications of all your business directors, opening a new bank account for your limited company may take up to four weeks.

Opening a Bank Account in the United States

To do business in the United States, limited firms established in the United Kingdom must obtain a bank account in the United States. This enables you to enter a large market and has the potential to significantly expand your company.

To begin, fill out IRS Form SS-4 to apply for a U.S. employment identification number (EIN).

Fill out W8/W9 forms to determine if you are a domestic or foreign corporation in the United States.

Consider establishing an account with a UK-based bank with US branches, such as Barclays or HSBC.

Find a U.S. representative, such as an accountant, who can accompany you to the bank with the necessary documentation.

Although opening a U.S. bank account for a foreign corporation might take several weeks, it can occasionally be done in a few days if you come prepared with your passport, a second form of ID, your EIN, your corporate paperwork from the UK, and your W8/W9 forms.

Because the United States has a treaty with the United Kingdom, you are not required to pay US taxes unless you are permanently established in the nation and have a fixed location. If you’re unsure, visit a tax professional in the United States to ensure you’re on the right side of the law.

Failure to pay taxes on time may result in an IRS audit of your company. If you’re unsure if your company has a permanent location, submit Form 1120-F to express your worries. This may safeguard you from losing deductions in the event of an audit.