Whether you are already a small business owner or planning to start a business, there are personal and professional reasons why it is essential to open a business bank account.
Keeping your business funds separate from your personal finances protects your personal assets and helps you stay organized and focused on your business priorities. It allows you to maintain better financial records — including tracking revenue and expenses — and will make it easier to calculate and pay taxes. Plus, it shows added professionalism to your clients or customers.
How do the account requirements vary by business type?
It’s important to do your homework when starting a business. One of your first steps is determining your business structure. Options include sole proprietorships, partnerships, corporations, S corporations and limited liability companies (LLCs).
Depending on your business structure and size of the company, there may be different requirements for opening a business bank account. Here are a few examples:
- Typically, the EIN is required for partnerships, corporations and LLCs. If you have a sole proprietorship, you can often use your social security number instead of an EIN.
- LLCs and corporations usually have a separate operating agreement with the name of the business and its partners. For corporations, these agreements are often referred to as corporate bylaws. You may need to show these documents when opening a new business bank account.
Reach out to representatives from your bank to learn about specific requirements for opening a business bank account once you have determined the type and size of your business.
The requirements for opening a business bank account can vary based on your business structure, what type of account you want to open and what bank you choose. Read on to learn how to open a business account.
What do you need to open a business checking account?
Opening a business checking account allows you to deposit funds, process payroll and pay for other expenses by check. Typically, opening a business checking account requires:
- Your Employer Identification Number (EIN) or social security number
- The legal name of your business
- Two sets of documentation:
- Legal formation verification:
- A copy of your business license or business license number or,
- Print out from the Secretary of State verifying active status
- Formation documents such as the following:
- Articles of Incorporation
- Operating Agreement
- Articles of Organization
- Meeting Minutes
- Legal formation verification:
What documents are required to open a business savings account?
A business savings account helps separate your daily expenses from funds you would like to use in the future. Depending on the bank you choose, you may also be able to earn interest on funds in your savings account that can be invested into your business.
The requirements for opening a business savings account are the same as the requirements for a business checking account (listed above). Check with your bank to learn more.
Choosing WaFd Bank for your business bank account
WaFd Bank is a local bank that provides business banking solutions so you can easily manage your business.
We offer a variety of products and tools to help you get your business off the ground — or to the next level — including:
- Business checking accounts designed with your business in mind
- Business savings accounts with benefits like the ability to earn interest
- Business term loans to help you purchase equipment, make capital improvements and/or finance future expansions
- Business lines of credit so you can borrow funds or support seasonal or cyclical cash flow
- Acquisition financing when looking to buy or sell a business
- Equipment financing to replace or add equipment for business use
- Commercial real estate financing
- Treasury Management allows your business to efficiently manage your cash flow
- Merchant services to help your business quickly and securely process payments from clients or customers
- Payroll processing services to pay yourself and your employees
At WaFd Bank, we want to make things as simple as possible so you can focus on building a successful business. Find your local WaFd Bank branch to learn more or open a business bank account online today.