Requirements to Open Business Bank Account

business bank account

Managing a large amount of money and keeping it safely would be difficult for an individual. Thus, you require a bank where money can be deposited safely and the bank pays interest on such amount to the customers. Business depository account or the current account refers to the transactional account which offers numerous flexible disbursement methods. This is to facilitate customers so that they can directly distribute money to others. Commonly, you will find the facility of a checkbook with this account along with arranging facility of standing orders, debit card payment as well as direct debits. In this account, you can get the service of borrowing an amount through overdraft facility.
There are two different modes of lending money in this account.

  1. Overdraft.
  2. Offset mortgage

There can be a number of requirements to open the business bank account. In general, big or small, home based or commercial firms require separate business account so as to manage personal as well as business-related finances properly. Whenever you open such type of account a bank always requires legitimacy proof of one’s status. Opening such type of account may be a simple task once an individual is completely aware of the different requirements. These essential prerequisite are mentioned below-

  • Tax identification number: you can also call it as owner identification number. From IRS anyone can obtain TIN or even EIN. It will function as social safety number. In the case of sole proprietorship, there is no need for TIN unless there are employees working under you, SSN will suffice.
  • Business licenses: whenever you apply for opening a current account with any private or public sector bank, you have to present an official license of your business. Company’s registration serves as a confirmation to the bank about the validity of your business which is acknowledged by the state. Businesses which are directly serving to the public often require licenses. It is evitable to bring all registration paperwork along with business licenses whenever you are applying for opening a current account.
  • Business address: it is essential to bring address proof in the form of electricity or telephone bill addressed by the state to one’s business.
  • Fictitious name: the name of the firm can be received by applying via the form to labor department or the commerce secretary as per your state rules/regulations. Company’s name is always different than one’s first as well as last name. It can be referred as DBA –“doing one’s business as”. Bank requires such form when anyone wants to open a current account under his/her company name.

Number of advantages which one can avail from opening current account

  1. Managing funds become easier and financial issues are prevented.
  2. The main benefit which can be availed from opening such type of account is that it enhances the credibility of the firm with creditors & customers furthermore it establishes business identity.
  3. Many services are included under this account as payroll services, online banking without any charges, business loans etc so that business can function more proficiently.
  4. Even employees get the opportunity of accessing business account and by issuing ATM/debit cards to them expenses can be paid directly via such account.