Opening a Business Bank Account
Every small business, no matter the size needs a business bank account. Although many small business owners think it is fine to mix personal and business accounts, nothing is further from the truth.
What To Look For in a Bank
When considering a bank, look at the following:
- A bank that is close to your place of business: This will make depositing and withdrawing funds easier.
- The charges that apply for various services: Services may incur fees if you drop below a set minimum balance, if you write more than a certain number of checks, or if you go beyond a certain number of teller visits. Consider all of these fees carefully – it really can add up.
- Size: Smaller, local banks take more time to help new businesses in their community. Larger, national banks have more services. Look at both kinds of banks to determine your needs and how they fit their offered services.
After you have selected a bank, you will need to determine your Business Bank Account Needs.
Your Needs Are Important
First you will need to think about the formation of your business. Different forms, such as a sole proprietorship, partnership, corporation or limited liability corporation will need different types of accounts.
Then think about how you will use your account. Are you likely to make daily deposits or only one each week? Will you be writing a large number of checks?
Will you use a debit card associated with this account? Do you want to be able to do online banking? Will you need to do most of your banking in person?
Different types of checking accounts exist for different banking needs and have different fees associated with them. It would make no sense to pay for a deluxe account if you only need basic services.
Once you know what type of account suits your business best, it is time to sign up for the account.
A Morning at the Bank
In order to make the process go smoothly, you will need to have the right documentation with you. You will have to prove that you are a business and show that you are eligible for a business account.
The following documentation will be needed to open a business bank account:
- Your taxpayer ID, which can either be your social security number if you are a sole proprietor or partner, or a Federal Tax ID if you are a corporation or LLC.
- A certified copy of the fictitious name certificate if the business has a name other than your own name.
- 2 pieces of current identification for each person that will be allowed to have access to the account, including signing checks.
Be sure to go over any questions you may have about the new account. Also be sure that you get the terms of the account in writing.
The benefits of opening up a business bank account are many. Having one will make you appear more professional to both clients and investors.
It will also help you figure out your income and expenses for the purposes of budgeting and taxes. Since setting up a business checking account is easy, there is no reason not to do it.
More on Opening A Business Bank Account
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