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Business Bank Account Checklist: Documents You'll Need

Kiely Kuligowski
Kiely Kuligowski

Find out which documents and licenses you'll need to bring with you when you apply for a business bank account.

  • To open a business bank account, you will need your articles of incorporation, employer identification number and personal identification documents.
  • You can set up business banking accounts for both checking and savings.
  • A business bank account is necessary to keep your business and personal finances separate.
  • This article is for small business owners who are interested in opening a business bank account and want to know what they need to get started.

Business bank accounts help you manage your business finances in a professional manner and keep them separate from your personal finances. However, opening a business bank account requires more effort than opening a personal account. There are documents to gather, names to be determined and licenses to get in order. Learn what you need to do to open a business bank account and why it's worth the effort.

Benefits of a business bank account

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

Limited liability protection

Business banking helps limit your personal liability by keeping business funds separate from your personal funds.

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

Purchase protection for customers

Many banks offer merchant accounts as a business banking option. Merchant services are a business advantage because they provide purchase protection for your customers and also protect their personal information.

Professionalism

A business bank account allows checks to be made out to the business – which looks more professional and aboveboard than requiring customers to make out checks to your name. It also gives you the option of allowing customers to pay with credit cards and employees to handle banking tasks on behalf of the business.

Credit options

Some business bank accounts provide an option for a line of credit that you can use in an emergency. Many also offer business credit cards that you can use to start building a credit history for your fledgling business.

Key takeaway: A business bank account keeps your business finances in a separate account, allowing customers to pay your company directly. It may also provide you with a line of credit and a business credit card that you can use to build credit history.

What you need to open a business bank account

Before you apply for a business bank account, 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 Rampenthal. "It's essential to prepare all necessary documents from the get-go in order to facilitate a painless process." 

Here's everything you'll need to open a business bank account.

Articles of incorporation

Your articles of incorporation show the bank how your 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.

Business licenses

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."

Doing-business-as name (DBA) certificate

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. She 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 bank account under their business name.

"Filing for a DBA allows entities to do business under another name without having to form a new organization," Sweeney said. "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."

Employer identification number (EIN)

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, co-founder and CEO of credit solutions and monitoring firm Nav. EINs are also used to prevent identity theft, fraud and money laundering. King added that, while some banks allow a sole proprietorship 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."

Identification documents

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."

Key takeaway: To open a business bank account, you'll need to present documents that prove your identity and the legitimacy of your business.

How to open a business bank account by company type

According to Grant Aldrich, founder and CEO of OnlineDegree.com, opening a business bank account follows the same process regardless of your business type, with the exception of sole proprietorships.

"If you're a sole proprietor, you need to bring your Social Security card instead of your EIN," Aldrich said.

Sole proprietors still need to bring their business license, DBA certificate and personal identification documents.

Key takeaway: Most banks do not have a separate process for each business type – except for sole proprietors, who will use their Social Security number instead of an EIN.

Is it better to apply in person or online?

Rampenthal said 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.

The banks that do give you the option of applying for a business bank account online may take more time to review your documents and create your account than they would if you applied in person. If the bank you choose offers both application options, you'll need to decide if you prefer the convenience of applying online and you're willing to wait for your account to be set up or if you're willing to go to the bank in person to have your account set up the same day.

Key takeaway: Depending on your bank, you may not be able to apply online. If your bank offers an online application, it may take more time to set up your account than if you were to apply in person.

Type of business bank accounts to consider

As with personal banking, there are various types of business bank accounts. You may need to open more than one account, depending on your banking needs. Here are some common options:

  • Checking account: A business checking account is a great choice for managing payroll, expenses and other basic financial tasks that keep your business running, advised Kimberly Porter, CEO of Microcredit Summit.
  • Savings account: In addition to a checking account, you'll likely need a business savings account to hold your earnings. "A savings [account] is a good place to keep your business earnings to start earning interest on it, and have a fallback of cash when needed," said Porter.
  • Merchant account: If you plan to accept credit and debit card payments, you may enjoy the convenience of setting up a merchant account through your bank. "Depending on who you bankwith, some banks offer merchant services as well," said Julia Spahiu, founder and CFO of Edi and Sienna Group. "I suggest all my clients to shop around before settling for one particular account, and also renegotiate your rate at least once a year."
  • Credit card account: You can use a business credit card for emergencies or miscellaneous items for your business. The chief benefit of a credit card for new businesses or those with bad credit is that it can help you build or improve your business credit score.

Key takeaway: The four main types of business bank accounts are checking, savings, merchant and credit card accounts.

Things to consider when choosing a bank for your business account

Business owners have many banking options, and every bank offers something a little different. Take your time perusing the various options until you find the right bank for your business.

"Always shop around," said Mike Swigunski, founder and CEO of Global Career. "Banks are as keen to gain new customers 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 has a different set of fees and features – and business accounts typically have higher fees and minimum balance requirements than personal accounts.

Tracy Odell, vice president of content at FinanceBuzz, recommends 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."

Key takeaway: When looking for a bank for your business account, take your time researching the different requirements, features, fees and sign-up bonuses.

Simone Johnson and Jennifer Post contributed to the reporting and writing in this article. Some interviews were conducted for a previous version of this article.

Kiely Kuligowski
Kiely Kuligowski,
Business News Daily Writer
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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 now writes on small business, social media, and marketing. You can reach her on Twitter or by email.