⏰ Estimated read time: 6 minutes
You need information about yourself and your business to open a business bank account. Gathering what you need in advance can make the process a breeze.
Exact business bank account requirements will depend on your business entity and which financial institution you choose. But the following checklist can give you a head start and prepare you for how to open a business bank account.
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Checklist: What you need to open a business bank account
Personal information |
☐ Government-issued photo ID (some banks may ask for two). ☐ Home mailing address. ☐ Personal phone number. ☐ Personal email. ☐ Date of birth. ☐ Social Security number. |
Business information |
☐ Employer identification number (if you have one). ☐ Business name. ☐ Trade name or dba name (if applicable). ☐ Business address and phone number. ☐ Business entity type (sole proprietorship, partnership, LLC or corporation). ☐ Date your business was formed. ☐ Industry and type of business you operate. |
Business documentation |
☐ Sole proprietorships: Business name registration certificate, business license. ☐ LLCs: Articles of organization, LLC operating agreement, business license. ☐ Partnerships: Partnership agreement, business name registration certificate, business license, state certificate of partnership. ☐ Corporations: Articles of incorporation, corporate bylaws, business license. |
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Requirements to open a business bank account
Specific business bank account requirements will vary from bank to bank, but most financial institutions require the following combination.
Personal information
Businesses owners typically need to include personal details and identification, including:
- Government-issued photo identification. Typically a driver’s license or passport. Some banks may ask for two types of ID.
- Home address. You need to have a U.S. mailing address to apply for most business accounts. Banks typically require a physical address rather than a P.O. Box.
- Personal email and cell phone number. Financial institutions use this information for two-factor authentication. A handful of online business checking accounts are mobile only and require a cell phone number to apply for an account.
- Date of birth and Social Security number. Banks use this information to verify your identity, which they are required by law to do.
🤓 Nerdy Tip
Businesses with multiple owners typically need to include personal details and identification for every owner with 25% or more ownership in the business.Business details
Most business account applications will ask for basic business information, such as:
- Employer identification number. You may also need to provide corresponding documents from the IRS. Sole proprietors and single-member LLCs that don’t have an EIN may be able to use their Social Security number.
- Business name and trade name or “doing business as” name, if you have one. No official business name? You can use your own name.
- Business address and phone number. You can use your home address if you don’t have an office or a storefront.
- Business entity type. Sole proprietorship, partnership, corporation or LLC.
- Date your business was formed. If your business is registered with the state, use that date. If not, use the date the company was founded.
- Industry and type of business you operate. Certain types of business — such as gambling, cannabis and adult entertainment companies — cannot open a business account with most banks.
Business documentation
The documents needed to open a business bank account depend on how your business is set up. Here are common requirements for different entity types:
- Sole proprietorships. Business name registration certificate, business license.
- Partnerships. Partnership agreement, business name registration certificate, business license, state certificate of partnership.
- LLCs. Articles of organization, LLC operating agreement, business license.
- Corporations. Articles of incorporation, corporate bylaws, business license.
Why open a business bank account?
Business bank accounts serve many functions beyond simple cash flow. Benefits of a business account include separating — and safeguarding — your assets and making it easier to manage invoices and tax deductions.
- Streamline bookkeeping: Running all of your company’s income and expenses through a dedicated business account makes it easier for you to track outstanding invoices, generate financial statements and apply for business loans and grants.
- Simplify tax preparation: Using a business bank account also makes it easier to file your taxes. You won’t need to untangle business and personal expenses — that’s already done for you. And many business checking accounts integrate with popular business accounting software, making it easy to categorize expenses and identify deductions. Some business checking accounts for freelancers also have built-in tax planning tools to help you estimate and file your self-employed taxes.
- Protect personal assets: Your business’s legal structure — if you’re an LLC, partnership or corporation — can shield your personal assets in a lawsuit. But mixing business and personal assets can jeopardize that protection. Using a business bank account for company transactions helps preserve the legal distinction between you and your business.
What to look for when opening a business bank account
There is no one-size-fits-all business bank account. What works best for a brick-and-mortar restaurant might not work for a food truck. A retail store's needs won't match those of a cashless e-commerce business. If you're opening a business bank account for an LLC, you might want different things than a sole proprietor would (like more than one debit card).
So, what should you look for in a business bank account? Features and services that fit how you do business. Consider the following:
Minimal fees
A free business checking account is ideal, but some top accounts carry monthly fees. Do the math to make sure you can hit the balance requirements to avoid the fee, or that the added features are valuable enough to justify the cost.
Look beyond monthly fees, too, and take into account things like ATM fees, wire transfers, overdrafts and other miscellaneous fees.
No restrictive limits
Business checking accounts from brick-and-mortar banks typically place a monthly cap on fee-free transactions and cash deposits. While online accounts might offer unlimited transactions, many don’t allow cash deposits (or charge a fee to do so). Business bank accounts may also cap ACH transfers, mobile deposits and other types of transactions. Read the fine print and evaluate your business needs to make sure you won’t feel constrained by whatever account you choose.
Similarly, business savings accounts will have their own limits, including how (and how often) you can withdraw funds.
Useful, attainable perks
Scrutinize the flashy perks marketed by business banks to ensure you’ll actually benefit from them. A business bank account that boasts a sky-high annual percentage yield (APY) is a great get for a small-business owner — unless you need a $1 million minimum balance to start earning interest. Likewise, banks like Grasshopper Bank and LendingClub offer 1% cash back on all debit card purchases. But some other accounts only offer cash back when you use your card at select merchants, limiting the usefulness for business owners.
