Why Get a Business Bank Account?
A business checking account helps avoid piercing the corporate veil, basically helping to keep personal assets protected against business loss and liability. If you don’t have a business bank account, you could end up being held personally liable should someone come after your business, i.e. sue your company.
You don’t want to think about losing your home, vehicles, and having to liquidate your IRA and other retirement accounts. For this reason, get a business bank account for your business.
How to Get a Business Bank Account
Getting a business bank account requires finding the right bank for your needs, showing the right business documentation, and finally applying for and funding the account.
Please follow these instructions to ensure you don’t run into any problems and can get a business checking account setup.
Steps to Opening a Business Bank Account:
- Provide documentation. When you go to open a business checking account you’ll need to provide certain documentation like documentation that verifies the name and general nature of your business, your incorporation documents, DBA certificate if applicable, along with your Employer Identification Number (EIN)/Social Security Number.
- Prove your identity. You’ll also need a couple of forms of identification to verify you are who you say you are. You may want a state-issued driver’s license and your US Passport.
- Do your due diligence. You’ll want to research which bank and which business checking account at that bank is right for your particular business. In most instances, you’ll want to find out about the best banks for small businesses as this is typically what the newbie entrepreneur is—a small business owner.
- Formally apply for a business checking account. Once you find the right bank, it’s time to go in person or online and formally apply for a business checking account. There are other accounts you may want to get, some may be beneficial, like a small business savings account, just for the reason it may reduce some of your small business checking account fees. Ask your banker about this to ensure you save as much money as possible.
- Fund your business checking account. Once you’ve filled out the paperwork, signed the opening agreement and signature card, you’ll need to, in most cases, fund the account with an initial deposit. Different banks have different requirements. Keep in mind that some banks will require you to keep a certain amount of cash in your business checking account to keep you from paying a monthly fee, again check with your bank.
- Connect a merchant account. After you’ve funded the account you’ll want to make sure that you connect your merchant account with the bank account to ensure that as you process credit card transactions, these monies drop automatically into your business bank account.
- Use your business checking account for business purposes only. Now that you’ve completed the setup process for opening a business checking account, it’s important that moving forward you never use this account to pay for personal expenditures. Keep this account separate to avoid IRS penalties and other liability issues.
Best Banks for Small Business
The best bank for small business is the one that fits your business the best. Whether it’s an online business bank, a national bank, or a bank that does SBA 7(a) loans, there’s one for your needs.
We’ve put together in-depth reviews for numerous small business checking accounts that fit these criteria and more: