How To Open A Business Checking Account
Every business should open a business checking account in order to keep business expenses separate from personal as well as track necessary spending for the business. Having a separate account can also allow tax preparation and business projections to go more smoothly. Many new business owners may need assistance in this area. Here is a systematic guide to show how to open a business checking account.
1. Social, Tax ID, and Fictitious Name Certificate
Every bank will require certain documents when opening a business account that is the name of the business rather than the owner’s name. If it is a small business, such as a sole proprietorship, the bank will require the owner’s Social Security number. However, for any other business, the bank will need the business tax identification number provided by the IRS. A fictitious name certificate is also required. If the company is a partnership, LLC or corporation, additional documents showing the incorporation or partnership will be required as well.
2. Photo Identification and Bank Account Numbers
Not only does the business owner need to show the business is legitimate, but the owner also has to validate his or her own identity. A copy of a government issued identification card, such as a driver’s license or US passport, are also required when opening a business checking account. Some banks may also require the business owner to transfer funds from a personal checking account to initially open the account. This can be done simply by writing a check or completing an electronic fund transfer from one account to another.
3. Signature Card
Whether the business owner opens the business checking account online, over the phone or in an office, the individual will be required to complete a signature card for the account. This card serves two purposes. The first purpose is to have a copy of the business owner’s signature on file for comparison to checks and other account transactions completed. In addition, once the owner signs the signature card, it does indicate acceptance of the banking or business checking account terms and conditions. These terms include fees, minimum balances, and other account details.
4. Pick an Account that Works for the Business
Business owners should review all the options available to them when selecting the right business checking account for the business. If it is a fairly new or small business, then the owner may want to focus less on maximum transactions and more on minimum balance requirements. In addition, keep in mind the businesses projected growth. If the business is projected to grow quickly over the next three to five years, then it may be a good idea to go with a bank that offers multiple business accounts that allow the business checking to change as the business grows.
A business checking account is a valuable asset to have within any company. These accounts allow business owners to separate business expenses and income from personal finances, but also give the owner a measure of control over spending. In addition, having a business account in the business’s name provides a more professional appearance, especially when customers pay for items via check.