What is a corporate bank account?
A business or corporate bank account works the same as a personal bank account, it may have checking, savings, credit and merchant accounts. However, the purpose is for a corporate entity to have its own finances without being mixed to the owner(s).
What are the benefits?
There are many benefits to a corporate bank account, here are a few:
- Protection: Banking as a business offers a limited liability protection to keep the business funds separate from your personal funds.
- Professionalism: As a business grows the perception that costumers have is extremely important, with a corporate bank account costumers will be able to pay the owner(s) with checks, debit, and credit cards directly to the business instead of the owner(s) personal account.
- Purchasing and Credit Power: Having a credit card account helps stablish a credit history in your business, this way the business can be truth worthy and have more purchasing power when dealing with banks.
- Taxes: A lot of expenses can be classified as a business expense and this way an owner can save on taxation.
- Organization: A business account provides a clear picture of the profit, loss of the business. Finances don’t get mixed with personal.
Things to consider:
When opening a corporate bank account there are things that an owner must consider.
Business checking and saving:
- Intro fees
- Interest rates
- Interest rates for lines of credit
- Minimum account balance fees
- Transaction and early termination fees.
- Discount rate: Percentage for every transaction
- Transaction fees: the amount for every credit card transaction
- ACH daily batch fees: Fees charged for settling transactions for a day.
- Monthly minimum fees: Fees charged if monthly requirements are not met.
Requirements needed for opening a corporate account:
- Select a business structure (LLC, Corporation, partnership, sole-proprietor)
- Business must be stablished in department of corporation of state (Ex: www.sunbiz.org in Florida)
- Request Tax ID. (EIN for LLC’s and Corporations or social security for sole proprietors)
- Create an operating agreement (If necessary)
With all the information presented considered, the business owner(s) should go to a bank and be able to open a bank account for their business.