January 29, 2023

Data Protection

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Business Bank Account Checklist: Documents You’ll Need

Let’s start our article with an important statistic.

According to Businesswire, almost 26% of small businesses don’t use a separate bank A/C to leverage their organisation. And, that’s quite alarming for three reasons – 

  • It can cause a lot of confusion while noting down your month-end personal as well as business-related financial endeavours.
  • The job of bookkeeping becomes nearly impossible to conduct. After all, in this case, you have to go through two different types of expenditures as a whole.
  • You won’t be able to identify the amount of tax you’ve had to pay this month for your business. And, it, in turn, might affect your business-related planning.

So, the moral of the story? 

Whether you own an SME or something else, it’s always crucial to keep one separate account for your business. Or else, you might end up falling in a never-ending pothole.

But, here’s a set of questions for you.

  • Why should you really open a brand new business bank account? 
  • Will it only help you avoid confusions? Or, is there something else? 
  • And, do you really need something else to create the new account? 

Well, we have answered all of these questions in the latter part of the article. So, if you want to know all about them, please keep reading till the end!

The Importance Of Having A Separate Bank Account

Having a separate bank account for your business can make your life a lot simpler and easier as a whole. Here’s what you need to know about it.

Benefit – 1: It Can Protect Your Personal Fund.

If you’re using a single account for your business and personal fund, your savings might end up being at a lawsuit risk. That means, in case someone sues your business, you may have to pay them through your personal finance. So, it’ll be a massive loss for you in the end.

Benefit – 2: You Can Accept Credit Card Payment.

If you have a personal bank account for your business, you won’t be able to accept credit card payment from your consumers. This, in turn, might lead to a convenience restriction for your organisation. And, you might end up losing a huge part of your customer base due to that.

Benefit – 3: It Will Help You Maintain A Professional Appearance.

Not having a separate bank account for your business corporation is quite an unprofessional and novice-like decision. Hence, if you want to maintain a professional demeanour in front of your audience, it’s best to have one. After all, it’s for the betterment of your company.

What Will You Need To Create A Business Bank Account?

Opening a business account, in essence, is quite an easy task. But, as it’s an official matter, it would be best if you worked with ICD Fiduciaries, an expert in this segment. Thanks to their connection and expertise, they’ll ensure that you’re not making any mistakes at all.

Anyway, so, the documents you’re going to need are –

  • Your EIN (employer identification number) and SSN (Social Security Number).

Note: In case you don’t have an EIN, you’ll be able to get it by following through the official website of the SME-overseeing organisation. The process is pretty easy to complete too.

  • Personal identification (like your personal bank account opening sequence, you must offer your passport, driver’s licence, and state-issued identification, too).
  • Agreement of ownership (if you are running a corporation or a partnership, you or the other owner will need to sign an agreement. It will outline your rights accordingly.)
  • The business formation documentation (for an LLC, it’ll refer to the articles related to the company incorporation, including the management structure, owner data, etc.)
  • Your business licence (your bank will need to see if your organisation has the correct proof or licences to start a trading corporation).
  • Certificate of your company’s name (you’ll have to create a brand new name for your business and certify it from the government. Make sure that it’s unique).

Apart from these, if you want to open a merchant service account, you’ll need to provide your monthly credit card revenue too. If you don’t have any concrete information on-hand, it’ll be best to offer an estimate regarding the same.

The Bottom Line

As mentioned before, the process of creating a bank account isn’t easy at all. However, if you want to make the most out of it, you’ll need to follow the right path.

For example, you should always choose a bank that’s outright professional and doesn’t have a single black mark in their resume. Besides this, choosing the right account will also be crucial here. You’ll be given three choices here –

  • A business checking account.
  • A merchant services account, and 
  • A business savings account.

So, select the option that seems to be ideal for your business structure. And, that’s it.