Do I Really Need a Business Bank Account?
Does your business really need its own bank account?
100% yes!
Here’s why:
#1 Keeps finances separate
You’ll have a much easier time keeping track of your business’ income and expenses. And if your business is ever audited, you’ll be so grateful you took the extra step of opening its own bank account.
#2 Professionalism
Having a separate business bank account makes your business look professional.
When you make payments with business checks and accept payments written in your business’ name, people will take you more seriously.
#3 Liability protection
If your business is set up as an LLC, it is ESSENTIAL to have a separate business bank account.
The perk of having an LLC is the “limited liability” part, and if you end up in a situation where you could be found liable, having your personal money all up in your literal business can complicate things.
#4 Builds business credit
Did you know that your business can have its own credit score?
Yep! And opening a business bank account will help you build a good one. This comes in handy if your business decides to apply for a loan or funding.
Watch the Reel!
Ready to make it official and open your business bank account? Bring the following to a customer service representative at your bank of choice:
Identification
Even if you’re an established customer, your bank is likely required to verify your identity and make sure it’s up-to-date in their system.
Certificate of Formation / Trade Name forms
If you formed an LLC (limited liability company) with your secretary of state, a Certificate of Formation is the form you’ll receive once it’s approved. Your bank will need to take a copy of it to open your account.
If you’re a sole proprietorship operating under a trade name (also known as DBA or “doing business as”), you’ll need your trade name forms from the secretary of state.
If you filed the paperwork but have not yet received it, some banks will open your account and allow you 30 days to bring in the forms.
Tax Identification Number (TIN)
This is either your social security number or EIN.
An employer identification number (EIN) is basically your LLC’s social security number. If you don’t have employees, you may be able to use your social security number.
Head to IRS.gov/EIN to apply for your EIN. The application is short and you’ll receive your EIN paperwork at the end. It’s also free!
Initial Deposit
Determine your bank’s minimum dollar requirement to open your account and bring at least that amount. You can use cash or check.
(Also verify if they require that your account balance stay above a minimum. This will help you avoid fees.)
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