How to Open an LLC Bank Account

Now that you have set up your Limited Liability Company (LLC), and you have begun to get orders. Along with the orders, you are also getting the bills for the services and the supplies that you business needs. Even if it is to deposit the check of the customer or even just for paying for the business expenses, you would need to open an LLC bank account that would be under the name of your LLC.

Why Not Use the Personal Account?

Well, this might feel like a trouble. This mostly happens during the initial stages in a company where things are hectic and you are doing your best to keep your both feet on the ground as you follow all the demands that your business is bringing to you. And with all this, surely the personal bank account that you have would help a bit.

Sorry, but it does not work like this. When you were setting up your company, you selected to open an LLC, where you had established a separate business entity. And the reason you did this was so that you can be protected with the limited liability protection. Since your LLC is a separate entity from you, you need to put the finances of the LLC separate from your personal finances. Which is why you need to open an LLC bank account.

Even though it might be tempting to mix your personal and company funds together in the beginning, or you might be thinking that who would find out about this one thing, it is something that you should avoid. Since doing so risks jeopardizing this limited liability protection that you have at the moment.

Beside the legal requirement where you would need to have to open an LLC bank account and keep it separate from the personal one, there are other practical reasons as well. With the business account, you would not mistakenly mix the business finances with the personal one, and this would make it easy for you to calculate the taxes that you need to pay to the IRS.

Moreover, if you hire an accountant for taking care of the finances, you would not have to pay them to separate your business expenses from the personal one. This would help you save money instead.

Another reason why it is good to open an LLC bank account is the credibility issues. When you are entering into a new business relationship with a supplier or another company, it is not professional to give them your personal account. This would make them feel that you are not a genuine company. With the business account, you would show professionalism and this would get you trust and respect from the suppliers and the vendors.

In the end, as soon as you open an LLC bank account, you would have the opportunity to maintain it responsibly and consistently. This would assist you in developing your relationship with your bank that would be highly valuable if you need a business loan in the future. Now that this has become clear, let us understand how to open an LLC bank account in the next part.

How to Open an LLC Bank Account?

Even though it is not very easy to open an LLC bank account as compared to opening a personal bank account, it should not take a lot of your time. The only way you can have all done in time and in the right way is by doing a proper research first. At the end of the day, you would need to get the right papers to the bank so that you can easily open an LLC bank account without much hassle.

Research your options

Each and every business bank account is not the same and does not have the same features. And that is not it; there are millions of banks to choose from. But to reach to the right bank to open an LLC bank account for your business, you would need to put in efforts and do enough of research to see which one would meet your needs best.

There would be many different services and fee structures available, and would have to choose the one more suitable for you. Moreover, it is also important to see things like overdraft protection, the debit card availability and limit, or the ability to write the checks from your account. Other than this, you might also have to ask yourself if you would need more than one account for your business.

Additional questions that you need to ask yourself that would help you in choosing the right bank are:

• What is the minimum balance requirement that would work for you and your business?
• What are the maintenance charges and are you comfortable with it?
• Is the bank a good one where you know you would not have to suffer from any security issues ever?

These questions would help you make a better decision while choosing the bank where you would open an LLC bank account for your company.

What documentation do you need?

As you as you decide on the right bank where you would want to open an LLC bank account for your business, you can call the bank to find out about the documentation that you would need for the process to open the account. Most of the banks usually need you to bring the following documents:

• A copy of your LLC certificate of formation, the articles of organization of the LLC or any other equivalent document, as per the state in which you have incorporated your LLC in.
• Your Employer Identification Number (EIN) or federal taxpayer identification number of your LLC.
• The operating agreement of your LLC or any other documentation that states who is the authorized person that would sign on behalf of the LLC.

Other than these requirements, you bank would also need some other additional documentation. Hence, it is vital to call them before you go to open an LLC bank account for your business. It might end up being a wasted trip.

Process to Open an LLC bank account

As soon as you have gathered all the documentation that you need to give to the bank so that you can open an LLC bank account for your company, you would then have to meet the banker for initiating the process. By doing your research before visiting the bank, you would be able to make the final step an easy one when you take all the required documentation all at once.

Having a separate bank account for your company is not just a requirement for your LLC, it would also assist you in many other practical aspects of operating a business like the depositing customer payments, paying your business bills, and accounting for expenses.

In addition to this, utilizing the bank account properly would help you build a great relationship with your bank. This relationship would be of value and help when you want to raise funding for your LLC through bank loan. Hence, ensure that you follow the methods and open an LLC bank account for your business to avoid any trouble.

Now that you are clear with the idea, and why you need to open an LLC bank account for your business and keep all the finances separate from your personal funds, you can now begin to look for a bank in which you want to open a bank account in. In case you have not yet registered your business as an LLC, head to Inc Paradise now to have your company incorporated and registered with the government, before you can move ahead to open an LLC bank account.