How to Open a Business Bank Account
For any business to carry out everyday transactions and operations, a bank account is a necessity. It is important to open a business bank account in contrast to using an existing personal account. Mixing business transactions with other endeavors can result in misappropriation of funds, not to mention cause financial confusion. Additionally, in some states this is considered illegal. It is therefore, essential for every business entrepreneur to open a bank account at the onset of their business.
Choosing a banking facility is the first thing any business owner should do. This calls for research and comparison of different banks. You need to look for suitable banks for small businesses. Secondly, look at the types of accounts each bank has. Business checking accounts are popular for small businesses. This is because they are free, and the charges involved are minimal. When looking into bank accounts, look at the overall fees and charges you may incur in contrast to the interest rates. It’s better to start with an account that will help the business grow then later transfer to another account. Nonetheless, be aware of all the charges attached to any account you open.
Gather your documentation
After you have looked into a number of banks and finally settled on one, it’s time to get all your documentation together. Most banks have websites. You can visit the site to determine what documentation is required to open a business bank account. On the other hand, you could go to the bank and get the information first hand. This might be advisable because you will get a chance to ask any questions you may have in person. The documentation you need to bring with you when opening an account includes;
• Business details, i.e. business name, business undertaking, physical and mailing address, phone and FAX number.
• Source of business capital
• Employer Identification Number (EIN)
• Certificate of incorporation
• Your personal information, i.e. name, address, phone number, Social Security Number, email, ID or passport and drivers license.
• A document or bill to act as proof of the address you provide.
• Names of cosignatories if any.
• Sample of cosignatories signatures.
• Order in which account checks or documents will be signed.
• A business strategy.
Go through your documentation to make sure you have everything. More importantly, make sure every document is up to date and not expired. Banks are very particular about the information they require, as should you because this is the beginning of a business venture. Success of your business will be determined by how organized your finances are. So, take time when assembling all that you need for your new business account.
You should also consider asking your bank what other options you have in terms of accounts for your business. For instance, what can a savings account do for your business? Find out if you need credit cards as well and how they can affect your business. You do not have to do all this at once, but it is important to have this information at hand. Try and build a relationship with your bank. Businesses are about growth and development. For this to happen, banks have to be involved. Therefore, your affiliation with the bank should be respectable and beneficial.
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