How To

How to Set Up a Business Account at the Bank

Contributor
By eHow Contributing Writer
(28 Ratings)

Getting a business checking account will help you track income and expenses and prevent intermingling with your personal accounts.

Difficulty: Moderately Easy
Instructions

Things You'll Need:

    Determining Your Business Checking Needs

  1. Step 1

    Establish how your business is owned. Is it a sole proprietorship, partnership, corporation or nonprofit? You'll find that certain accounts are more suitable to your needs depending on how your business is structured.

  2. Step 2

    Figure out the number of deposits you normally make each week or month. A low-cost, basic plan may suit your needs if you make only a couple of deposits a week.

  3. Step 3

    Look at your last statement and calculate how many checks you usually write each week or month. A basic plan typically has limited check-writing privileges.

  4. Step 4

    Determine how much cash you deposit and withdraw each month.

  5. Step 5

    Examine your last statement to see the minimum and average balances you usually maintain.

  6. Step 6

    Decide if you want to do all of your transactions via ATM, the night depository or online. Do you prefer to do all of your banking in person? Banks usually charge higher fees for in-person banking.

  7. Signing Up for the Account

  8. Step 1

    Have the right documentation with you. All banks will require you to prove that you are a business. Eligibility requirements and the required documentation to open a business checking account vary by ownership type.

  9. Step 2

    Provide a taxpayer ID number to open the account regardless of ownership structure.

  10. Step 3

    Provide a certified copy of the fictitious name certificate if you are a sole proprietor and the account title is a business name other than yours. You must put your signature on file and you may authorize additional people to sign checks.

  11. Step 4

    Provide a certified copy of the fictitious name certificate for any business whose account titles are different from the names of the owners. Place on file with the bank the signatures of those who will be granted access to the account. Each signer must provide two current pieces of identification that include the signer's signature.

  12. Step 5

    Submit, in addition to the above information, a copy of the IRS Ruling on Tax Exemption, a statement on corporation letterhead indicating the corporation's tax-exempt status, and an employer identification number (EIN) for a nonprofit organization.

Tips & Warnings
  • Find a reputable bank that you've done prior business with. This could be the institution where you keep your personal accounts.
  • Select a bank that's conveniently located and easily accessible.
  • Be sure to take the time to choose the most appropriate account for your business. Picking the wrong one could cause you to pay an unnecessarily high amount in bank fees.

Comments  

KuanShiYin said

Flag This Comment

on 2/19/2009 Great; thanks.

zemzem82 said

Flag This Comment

on 1/26/2009 My business account is tied to my paypal and its great -zemzem.ecrater.com

wsmith said

Flag This Comment

on 3/28/2007 I completely agree with this comment. It seems that it applies to everyone except the last part needing an EIN for nonprofit organization. Do you need all (3) items for a nonprofit organization or just the last?

Anonymous

Anonymous said

Flag This Comment

on 11/22/2005 Your final point on this page is, I feel, unclear:

"Submit, [you say] in addition to the above information, a copy of the IRS Ruling on Tax Exemption, a statement on corporation letterhead indicating the corporation's tax-exempt status, and an employer identification number (EIN) for a nonprofit organization."

This certainly makes these steps sound compulsory, although certainly only the EIN can be compulsory. You should insert the phrase "if applicable." One never knows what level of knowledge the reader of a "How to..." article may have already, experienced or clueless.

Post a Comment

Post a Comment
  • Have you done this? Click here to let us know.
I Did This

Related Ads

Get Free Business Newsletters

Copyright © 1999-2009 eHow, Inc. Use of this web site constitutes acceptance of the eHow Terms of Use and Privacy Policy.   en-US

eHow Business
eHow_eHow Business and Finance