What Is Required to Open a Business Checking Account?
The specifics of what you’ll need to open a business checking account will vary based on your company’s legal entity type. In other words, bankers will ask for significantly different documentation from a corporation than they will from someone running a small business as a sole proprietor.
When filling out your application, you will likely be asked to produce a photo ID, your business license and other legal paperwork, and a tax identification number. You’ll also need to have the funds to make your initial deposit into your account once it is opened.
Documentation and Standard Requirements
Whether you apply for your business checking account through an online application or in person at your local bank branch, there are specific information categories that you’ll likely be asked for. Business owners should be prepared to provide the following items regardless of the business entity type and structure.
As a security precaution, the bank will want to confirm that you are who you say you are before allowing you to open a business checking account. They may ask for two forms of personal identification, one of which will need to be a government-issued photo ID like a driver’s license or U.S. passport.
Your bank or credit union will compare your ID against your company’s license and incorporation documents to verify that you have the authority to set up accounts on behalf of your business.
Regardless of the type of firm you are running, you will need to show the bank your current business permit. This is a document that confirms your enterprise is operating legally under state and local guidelines.
Your bank or credit union will also use your business permit to confirm your company’s name, address, and industry.
Tax Identification Number
The bank will require the tax identification number you use to manage your business’s taxes. This could be your social security number or Employer Identification Number (EIN) assigned to your company by the Internal Revenue Service (IRS). (You may have a nine-digit EIN if you have employees or are registered as a separate entity.)
If you have business partners who will also be authorized to use the account, those individuals will need to be present when it’s established. Supply the bank with a copy of the agreement that outlines the details and terms of your partnership.
Most banks will expect a cash deposit when your account is initiated. Be prepared with enough money to satisfy your institution’s minimum balance requirement.
Specific Requirements for Your Entity Type
Once you have everything to satisfy the general requirements above, you can also prepare by gathering additional documentation that will be needed based on your business type.
Sole Proprietor Business Checking Accounts
A sole proprietorship is the most straightforward business structure. Since there are no employees or partners, and the company taxes are calculated on the business owner’s tax return, your bank may only require:
Your social security number — A sole proprietorship won’t have an EIN; therefore, you’ll use your social security number to fulfill the bank’s tax ID requirement.
Alternate-name certificate — If you choose a business name other than your own, the bank will require a copy of your doing-business-as (DBA) registration certificate.
Limited Liability Partnership (LLP) Business Bank Accounts
When operating under an LLP structure, your business will require an EIN and the following documents to open a checking account:
Organization documents — These could include your state-filed articles of incorporation, a declaration of trust for an unincorporated business, and any other partnership agreements.
Business license — If you are working in an industry like food service or healthcare, you will also need to provide a copy of your business license.
S Corporation Business Accounts
For small business corporations, or S corps., expect the bank to ask for your EIN and the following:
Incorporation documents — You will need your articles of incorporation and, if necessary, your corporate charter.
Corporate resolution — To demonstrate that you have the authority to open a checking account for the business, you may need to obtain a corporate resolution signed by your S corp.’s board of directors.
Business license — If applicable, have a copy of your business license on hand to provide to the bank.
Limited Liability Company (LLC) Business Banking Requirements
If you set up your business as an LLC, you will need your EIN as well as:
Articles of organization — The document filed with the state where you incorporated.
Business license — Any applicable city or state business licenses issued to your company.
C Corporation Business Bank Accounts
C corps. are the most complex business entities; consequently, setting up bank accounts for these companies will require the most documentation. In addition to your EIN, you can prepare by gathering your:
Articles of incorporation — These are the certified documents you received from the state when you established your business.
Corporate charter — This document states who is authorized to sign on behalf of the business.
Corporate resolution — All corporate officers must sign this document stating the intention to open a new business checking account.
Business license — Any pertinent business licenses you have to show that you are operating legally.
Tax-exempt documentation — Nonprofit organizations will need an IRS 501(c) letter to verify their tax-exempt status.
If you’re considering opening a business checking account, collect the legal documentation needed for your entity type. This will help you streamline the process before reaching out to your bank.