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If you are operating as a limited company, then you have to set up a business bank account so you can receive payment and get paid.
The aim of this guide is to help you decide what you need, and what to look out for when searching for a business bank account.
A limited company is a separate legal entity from its directors and shareholders, and so it must be clearly separated from your own personal finances and those of any other directors in the company.
The company’s money also needs to be traceable throughout every stage of each transaction.
It can be tempting to use your personal bank account as this may be the most convenient and quickest option.
Setting up a business bank account is relatively straightforward. The key thing to bear in mind is that there are several choices which may influence your decision.
But if your company has other directors who bank elsewhere, then this isn’t going to be much of an advantage. Whilst your existing bank may be great for personal banking, this doesn’t mean it’s going to be the best for business banking.
All banks must comply with stringent regulations around money laundering, which means that they must carry out a series of checks before opening a new account.
You will need to take all the documents you received when your company was registered, for example, most banks like to see an original copy of your certificate of incorporation and articles, and any share certificates that have been issued. They will probably also ask to see your passport to confirm your identity.
This depends on the number of checks that the bank carries out to confirm your identity, and the identities of the secretary and any other directors, if relevant.
The types of activity going through your account will usually include:
Most high street banks offer business banking, but there is no such thing as a bank account for contractors.
Some of the critical things to consider when choosing a bank, other than the comparative charges, are:
If you choose a bank who doesn’t charge a fee, you shouldn’t have to worry.
However, many banks do charge for debit card transactions, transferring money, issuing or paying in cheques and withdrawing cash.
This can come as a bit of a shock if you’ve only had a personal account before, where everything was free.
If you’re wondering where to start, then we would recommend our business banking partner, Metro Bank.
They are committed to providing excellent customer service, have a good telephone and online banking platform, and are one of the few banks to offer free business banking to all SJD clients plus competitive tiered rates of interest.
To find out more about Metro Bank and download an application form, take a look at our business banking services.
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Appointing an accountant can save you time and stress when starting up on your own. If you would like to speak to someone about any of the above information or any other queries you may have, arrange a callback and a member of the team will be in touch.