Opening a Small Business Checking Account
posted on Friday, December 24, 2021 in Financial Tips
You may be tempted to just start your business and have all of your company expenses go through your personal accounts. However, having a separate checking account for your business allows you to easily manage your company’s finances. A dedicated small business checking account protects not only your startup but also yourself.
As your organization grows, you’ll find the separation of your business expenses from your personal ones convenient. Here are a few things you should know when opening a new checking account.
How to Pick the Right Financial Institution
Choosing where to deposit your money should be based on your company’s needs and financial goals. Different institutions offer a variety of services, perks, benefits, and fees. Consider those institutions that can offer you good customer service, affordable costs, and convenience.
Get the Necessary Documents
Once you have decided what financial institution is right for your business, you need to provide the documents they’ll be asking for. The documents required vary, depending on what kind of business entity you have, what state you live in, and where the business was established. Some financial institutions will require more documents than others, but here are just some of the common ones:
1. Social Security Number or Employer Identification Number (EIN)
Every corporation, partner, or LLC is required to have an EIN to open a bank account. It is required as proof that you run a legitimate business and for proper taxation purposes. If you have a sole proprietorship, you can opt to use your social security number instead.
2. Personal Identification
Another major requirement is the personal identification of the owners or authorized persons of the business. Financial institutions today accept government IDs such as passports, driver’s licenses, and other state-issued IDs.
3. Business License
Any company trying to apply for a checking account must also present enough licenses to operate as a business. They serve as proof that you are permitted to operate. Getting a business license varies from state to state, so doing your research on how to get one is essential.
4. Other Organizing Documents
Some financial institutions will require you to provide additional documents with basic information about your company. If you’re opening for a corporation, you must present articles to your chosen financial institution for incorporation. For an LLC, these documents are known as articles of organization.
After you are done gathering the documents, it’s time to present them to the financial institution of your choice. Once the application has been approved, the last thing you’ll have to do is to deposit some funds to activate the account.
Opening a checking account has never been easier. If you’re ready to open one for your business, contact us at Community 1st Credit Union and talk to one of our C1st representatives.