Using a Business Checking Account
Setting up a business checking account is an important step in starting a small business. While there may be some business owners who will be tempted just use an existing personal checking account, doing this is typically a bad idea for many reasons. It is much easier to just have a separate business checking account, especially during tax season. Any legitimate business should have a business checking account.
This includes home-based businesses, sole proprietors, and even tiny micro businesses can benefit greatly from having a business checking account. Conveniently, it is relatively simple to open a business checking account.
Steps to Opening up a Business Checking Account
Gather the appropriate documentation needed by the financial institution that will set up the business checking account. The following will be required:
• Articles of Incorporation for C-corporations or S-corporations
• Articles of Organization for LLCs
• Business License if required
• Funds to for the opening account balance deposit
• Social Security Number and an Employer Identification Number
• Two forms of identification with one of them having photo identification and other having a name and signature
After obtaining the necessary documentation, visit a local credit union or bank in a convenient area to set up the business checking account. Doing so in person can help start a relationship with the bank which can be important if later in the future the business needs to grow or expand. A better relationship means a better chance of getting more lines of credit or a small business loan.
Completing an application for a business checking account is fairly simple and only requires basic information such as a name, personal address, business name and address, social security number, and an employer identification number.
Next, it is important to make an initial deposit into the business checking account either by cash, money order, or check. It’s possible to find banks with very low prices for an initial deposit, for example as little as $100, but many will need larger initial deposits that can be around $500.
After the account is created, the bank’s representative will suggest ordering checks, but it may not be necessary to do through the bank since bank rates for purchasing checks are typically very high. It is best to first get the initial checks and then order more from a discount provider. Ordering them will require different pieces of information on the bank branch, the business, and account information.
The last step is to just start using the business checking account for payments and deposits for the business. It is important to keep in mind that if there will be another signer to the account, that person should be present when setting up the account and should have all the proper personal information as well.