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Business Bank Account Checklist: Documents You'll Need

image for WayHomestudio/Shutterstock
WayHomestudio/Shutterstock

Opening a business bank account requires more effort than opening a personal account – there are documents that need to be gathered, names to be determined and licenses to get in order – but all the work is worth it.

"A business bank account is essential," said Joe Bailey, operations director at My Trading Skills. "It legitimizes your business [and] opens up avenues for acquiring a business plan."

According to the U.S. Small Business Administration, most business bank accounts offer benefits and perks that personal bank accounts do not.

  • Protection – Business banking helps protect your company by keeping business funds separate from your personal funds. Merchant services also provide purchase protection for your customers and protect their personal information.
  • Professionalism – A business bank account allows checks to be made out to the business, customers to pay with credit cards, and employees to handle banking tasks on behalf of the business.
  • Preparedness – Some business bank accounts come with an option for a line of credit that you can use in an emergency.
  • Purchasing power – A business account allows you to build a credit history for your fledgling business.

Before you apply for a business bank account, however, make sure you have all your documents and information together. This will help the process move forward quickly and more smoothly.

"There are various factors business owners should consider when opening a business bank account," said Chas Rampenthal, general counsel at LegalZoom. "It's essential to prepare all necessary documents from the get-go in order to facilitate a painless process." 

Here is everything you'll need for a business bank account. 

A DBA, often referred to as a "fictitious name," allows you to conduct business "like marketing or advertising, or accept money under a name that differs from the existing name of your business," said Deborah Sweeney, CEO of MyCorporation.com. Sweeney added that most banks require a certified copy of a DBA to open a business bank account since entrepreneurs aren't allowed to use their personal accounts under their business name.

"Filing for a DBA allows entities to do business under another name without having to form a new organization. For example, imagine an entrepreneur named Tom Johnson. Tom is a sole proprietor who runs his own business and wants to open up a sandwich shop called Subs 'n Chips. Tom wants this business to operate under the Subs 'n Chips name and not under his own name, Tom Johnson. As such, he would need to register for a DBA so he could do business under this name, including accepting and signing checks made out to and on behalf of Subs 'n Chips."

If you're a sole proprietor, you will need an EIN, your Social Security number, and a driver's license or passport, according to Levi King, founder and CEO of credit solutions and monitoring firm Nav.

"These are used to prevent identity theft, fraud, terrorism, laundering, etc.," said entrepreneur Jay Coates. King added that, while some banks allow sole proprietors to open accounts without an EIN, it's still a good idea to create one.

Rampenthal said that the EIN is an integral tool for managing taxes and paying employees.

"Sole proprietors may use their Social Security number for business tax purposes in lieu of an EIN," he added. "You can obtain an EIN for your business by filing with the IRS."

Articles of incorporation show the bank how the business is structured, and you use them to register your business with the state and other entities.

"If you form a business as an LLC, limited partnership, corporation or other separate legal entity, to open a bank account, you will need the articles of incorporation that you filed with the state if you are the sole owner," said Tiffany Wright, president of The Resourceful CEO, a financing advisory firm for small and midsize businesses, and project director at Cogent Analytics LLC.

Rampenthal said that, regardless of business entity, banks will generally ask for your current business license to prove you are legally permitted to conduct business in your region.

"This also ensures that your business is accountable for all actions taken – including taxes and finances," he said. "Check with your state, county and local governments to determine if you need any licenses to operate your business."

As with any bank account application, you'll need to provide documents proving your identity.

Forms of proof "can include a government-issued picture ID, such as a driver's license or passport," Rampenthal said. "This is used in order to corroborate [that] the business owner is indeed the person who owns and/or runs the corresponding business."

Coates has experience opening a business bank account both in person and online, so he knows the benefits and downsides of each.

"When I opened my online account, I had to email and upload all of the above-mentioned documentation," he said. "Then I had to wait 48 hours for them to process it and open my account versus in person, [where] the account was approved and opened [the] same day."

Rampenthal noted that some banks do not offer the option of opening a business account online, either to cut down on the risk of identity theft or due to the nature of certain businesses.

"No matter what type of business you own, you should always separate your personal and business finances," he said. "The first and most important step toward successfully separating your finances is to have separate bank accounts."

Remember that there are many options available for business owners and that every bank will offer something different. Take your time in perusing the various options until you find the right one for your business.

"Always shop around," said Mike Swigunski, founder and CEO of Global Career. "Banks are as keen to gain new customers as much as they are to retain current ones, so use this to your advantage to get better deals."

You should also be aware of fees. Every bank will have a different set of fees and features – business accounts typically have higher fees and minimum balance requirements than personal accounts.

Tracy Odell, vice president of content at FinanceBuzz, recommended asking about bonuses when you apply.

"Sometimes banks offer bonuses for opening a business account with them," she said. "For example, a bank might offer $300 if you open an account and maintain a certain minimum balance. These offers can be a great way to earn a little extra revenue, but keep in mind that these bonuses are taxable. Don't be surprised if you get a 1099 for the bonus next tax season."

Additional reporting by Jennifer Post. Some interviews were conducted for a previous version of this article.

Kiely Kuligowski

Kiely is a staff writer based in New York City. She worked as a marketing copywriter after graduating with her bachelor’s in English from Miami University (OH) and is now embracing her hipster side as a new resident of Brooklyn. You can reach her on Twitter or by email.

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