Opening a Business Checking Account

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Having a business checking account is an imperative part of running any business. Undoubtedly, this is a vital official element to your business that keeps your business financial record organized and allows you to easily manage employee pay, keep track of expenses, convey finances to investors, receive and deposit payments, and plan your budget more precisely. Additionally, it helps separate personal and business-generated finances. Opening a business checking account is a straightforward and hassle-free step, especially when you have all the necessary documentation in place.

Having the following will help make sure everything goes smoothly.

Professional Business Licences

Government agencies often issue permits that allow companies to conduct business within their geographical jurisdiction.

This permit, commonly referred to as a business license, is considered professional proof of business identity. In most cases, when opening a business checking account, banks will often require a business license with both the owner and business names. To set up a business checking account, be sure to bring your business license and registration paper work.

Fictitious Name

In cases when you operate or intend to do business under a different name other than your personal moniker, or if you’re incorporated under one name and you want to operate under another name, you will need a fictitious name or a Doing Business As (DBA) name. To receive the fictitious name, you have to submit a form to the relevant government agencies in your state of doing business, such as the Department of Labor or the Secretary of Commerce. This form will be a necessary proof to legitimize your company name.

Tax Identification Number (TIN)

To open a business checking account, you will need the tax ID number, or, depending on how your business is set up, your Social Security Number. To obtain a tax ID number, file a request from the Internal Revenue Service (IRS). Use the number issued to obtain a Federal tax identification number from the state you are doing business in. In case you are a sole proprietor, your Social Security number will serve the purpose.

Business Address

To open a business checking account, you may also need to bring proof to validate the business’ physical address. A bill from a recent communication addressed to your business from the state you are doing business in, or in some instances, a letter from a municipal representative confirming that the business is permitted to operate on the land managed by that municipality will suffice. However, the letter must bear the stamp of the relevant municipality.

The Bottom Line

Opening a checking bank account is an essential step for almost every business owner. This will successfully launch, maintain your business and help keep track of taxes you owe, business expenses, funds coming into the business donations made on behalf of the business, among others. When shopping around, make sure to keep the above documents and other factors like convenience, cost, and customer service.