Congratulations on starting your new business! There are few feelings like the excitement of starting something new.
I remember the most recent time I walked into a bank to open a new business account. I wore khakis and a button down shirt and a decent set of loafers so I’d look more professional (I always try to look a little nice when I want something from someone). After a short wait I was seated at a desk with a banker who went over my paperwork and requirements with me. I ended up signing a few things, creating an online login and walking out 15 minutes later with an official business checking account. That was quick and easy and I left with the feeling that this business is more real every day.
Aside from feeling more real, why should you get a business account? Who’s allowed to open a business account? And what do you need to do that? That’s what we’re going to explore in this article.

Why Should I Open a Business Bank Account?
One of the first things you’re going to want to do with your new company is separate your business finances from your personal. Remember we’ve talked about creating that barrier between your personal assets and your business assets to reduce your personal liability? Getting a separate bank account for your business is an excellent way to increase that barrier.
This not only helps to keep that liability barrier between you and your company, but frankly it’s just so much easier when all your business income and expenses are grouped together in one place. When you’re better organized you’ll be able to see the financial health of your business much more easily.
Do you have an accountant or tax person? Or maybe that’s you? Either way having a separate account for the business makes tax preparation easier too. Everything is in one place and you don’t have to worry about separating out that impulse Target purchase from your Staples supply run.
Another reason to separate your business accounts is to build business credit. Building credit can help you obtain financing in the future in the event you need to borrow to grow your business or get through a rough patch. If you do want to apply for credit they will want to see a clear history of your company finances and showing accounts that contain last month’s auto repairs, your kid’s summer wardrobe or your last trip to the liquor store aren’t going to win you any points.
Who Needs to Be Present to Open the Account?
Your bank checking account always requires your signature on file and for this reason you usually need to show up in person when the account is created. On one of my businesses my wife swung by the bank a few days later to sign her signature card, but she wasn’t needed to actually open the account. To open the account it depends on the business structure:
Business Structure | Who Can Open the Account |
---|---|
Sole Proprietor | Only the owner is required. If this is a Sole Proprietorship with your spouse then you will both need to be there. |
General Partnership | All of the partners will need to be there. |
Limited Liability Company | All of the members or managers will need to be there. |
Corporation | The president or secretary will need to be there. |
What Information Do You Need to Bring?
In order to open a personal checking account a bank needs to see some documentation to verify who you are. When you’re opening up a business checking account the situation isn’t much different. The bank still needs to know who you are, but they also need to know about your business and how you relate to it. That requires a bit of extra paperwork, but it’s nothing you don’t already have. There are three main things:
- The first thing you’ll need is your personal proof of identity. You’ll need to bring two forms of ID with the first being a valid government issued photo ID like your passport or driver’s license. The second form doesn’t need to be as formal and can be something simpler like a credit card or utility bill.
- The second thing you’ll need to bring is proof that you have a business and the authority to conduct business on behalf of that business. That’s a lot of “business”. What does that mean exactly? Let’s lay it out in another table:
Business Structure | What You Need to Bring |
---|---|
Sole Proprietor | If the business has your last name in it then in most states and most banks you don’t need to bring anything at all. When I first opened my consulting firm it was “Reid Tech Solutions” and I didn’t need any additional documentation. If you use another part of your name, like first or middle, you’ll need to check with your bank first as you may need to file a DBA. If you use a name unlike your own at all then you’ll definitely need to file a DBA and bring it. A DBA (Doing Business As) is a formal way of declaring that you will be doing business under a different name. It usually involves some filing with the local city, county or state and the publishing of this information in a local newspaper for a number of weeks. It’s not difficult and used to cost around $30 last time I did it – but that was over 10 years ago so be prepared to pay more now. |
General Partnership | The signed partnership agreement between you and your partners. |
Limited Liability Company | Articles of Organization and list of managers. You might want to bring the Statement of Information as well just in case. |
Corporation | Articles of Incorporation and probably the Statement of Information since it shows the company officers (you should be listed as the President/CEO or the Secretary). |
- The third and last item you’ll need to bring is your initial deposit. Most banks won’t let you open an empty checking account and you’re probably going to want some startup cash in there anyway. It doesn’t need to be much and different banks have different requirements ranging from $100 – $1,000. All the local big banks I’ve used only ask for $100 but check their website before you make the trip out there.
A Simple Summary
Why open a business bank account?
- Liability – separate the business from the personal
- Organization – keep your business transactions in one place
- Build credit – prepare for future financing if you need it
Who can open it?
- Sole Proprietor – the owner
- General Partnership – the partners
- LLC – the managers
- Corp – the president or secretary
What should you bring?
- Proof of who you are.
- Proof your business exists and is legitimate.
- An initial deposit.
And that’s it!