To guarantee optimal organization and avoid financial downfall, companies open business bank accounts. As a business owner without a business bank account, you need to open one immediately. Company owners who fail to realize the importance of separating their business and personal finances suffer in numerous ways. By not opening a business bank account they falter financially and legally. To ensure that you do not follow in their unsuccessful footsteps, you should start a business relationship with a smart bank. Continue reading to learn the requirements to open a business bank account.
Filing Formation Documents
Banks require filing formation documents to open a business bank account. These files are typically referred to as articles of incorporation, but the title varies by state. When you started up your business, you had to file it under the state you plan to conduct business out of. Provide your bank with evidence that your business is legally filed and runs accordingly to the law. Then, you can open an account and easily access business-specific funds and transactions.
Employer Identification Number
Another requirement banks have for opening a business bank account is an Employer Identification Number (EIN). Think of your company’s EIN as you would your Social Security Number. The bank demands this number because it is how the IRS files your taxes. Thus, it directly impacts your company’s financial status. If you do not have any EIN or tax ID number, you can easily receive one on the IRS website. Business owners who are not financially savvy should contact their accountant to assist them in filling out the EIN forms. When you have your number, have it ready to give to your bank so you can open up an account.
When applying to open a business bank account, your bank will ask to see your business license. They want to see proof that your business is running legally, which business licenses provide. If you do not currently have a business license, you need to obtain one from a federal agency. Understand that the processes for receiving a license differ per state. You can apply for a license online or in-person in the state you conduct business in. Once you have one, you can continue running your business in a legal manner. Furthermore, you have met another requirement to open a business bank account.
Banks require partnership agreements to open a business bank account as well. This agreement can be prepared rather easily. It must simply state the agreement you have with the company founders. Also, include how your business operates. If there are any potential problems that your company might face in the future, document them in the agreement too. Provide your bank with your partnership agreement upon opening a business bank account.
Proof Of Identity
Lastly, business owners need to supply banks with proof of their identity to open a business bank account. After all, they need to establish that you are in fact the owner of the company you are claiming. With so much fraudulent activity taking place around bank accounts, banks need to take precautions before allowing individuals access to companies’ finances. To prove that you are who you say you are, you can present government-issued IDs as you would when opening a personal bank account. A driver’s license or passport will suffice. As long as your name and photo match the name on the rest of the business documents, you will meet your requirements to open a business bank account. You should also remember to place your custom check order if the bank offers it for free.
To improve your company’s financial status, you need to open a business bank account. Firstly, provide your bank with documentation stating that your business has been filed by the state. Give them your Employer Identification Number so they can gain insight into your tax records. If you do not already have a business license, obtain one immediately to open your account. Put a partnership agreement together that includes how you conduct business. Finally, prove your identity with a government-issued ID. Then, you will meet the requirements to open a business bank account.