Requirements for Opening a Business Bank Account
Whether you run your business on a full-time basis or just as a part-time sideline, having a separate bank account for that business is critical. Commingling your business and personal accounts makes it very difficult to determine which expense are truly related to your business, and that could get you in trouble if the IRS audits your books.
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Identification Number
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If your business is set up as a corporation or a partnership, you will need to supply the bank with the employer identification number associated with the firm. If you do business as a sole proprietorship, you can use your personal Social Security number to open the account instead. You should always ask the banking representative about any identification requirements specific to the business account. Knowing which identification documents are required will allow you to bring those documents with you when you visit the bank.
Funding Source
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No matter what type of business bank account you open, you need to have enough money to meet the minimum balance requirements. The minimum required to open a business bank account varies from bank to bank, so check the fine print carefully to ensure you have enough to open and maintain the account. Also check any maintenance fees that might apply if your balance falls under a certain threshold. Some banks offer free checking and savings accounts to their customers, while others charge monthly or annual maintenance fees.
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Fictitious Name Form
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If your firm does business under another name, you will need to supply the bank representative with a fictitious name form when you open your account. This is often referred to as a DBA, which is short for "Doing Business As." For instance, a business owned by John Smith might do business as "ABC Corporation." The fictitious name form allows the bank to open the business account under the ABC Corporation name.
Business Address
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The bank needs to have a valid business address on file before they can open your account. If you run your business out of your home, you can use your personal address when you complete your business bank account application. If your firm uses a different address, you will need to record that address when you complete the application for your business checking or savings account.
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References
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