Key requirements for a business checking account
A checking account is a very useful account for any person, irrespective of whether they run a business or not. However, for businesses it is much more critical and important to ensure prompt payments without any hassles. Even a small business that is based out of home should have this type of account since it helps keep the official expenses separate from the personal ones. Though there are many banks and other financial institutions that offer the convenience of a checking account, there are a few requirements that you should keep in mind before opening the account. Here is a quick look at the basic requirements.
In order to open a business checking account, it is important to have a business license handy. If you do not have the license ready, you will have to register for it and get it at the earliest. This registration proves that your business is a legitimate operation that is permissible within state laws. The license proves the credibility of your company to the bank. Make sure you take the registration papers, along with the business license, when applying for a checking account.
Name of the company
The name of the company is also important to open a business checking account. Commonly referred to as “doing business as” name, the fictitious name is not the same as your name. In order to receive this name, you will have to submit the relevant documents either to the Secretary of Commerce or Department of Labor. If you want to set up the business checking account in the name of your company and not your name, then the form that carries the fictitious name is needed at the time of account opening.
Tax Identification Number
The Internal Revenue Service, referred to as the IRS, issues a TIN number to every business. This number is akin to the social security number for your business. You will need to submit the tax identification number to the bank at the time of opening the checking account for business purposes. A sole proprietorship company will not need the TIN, except when they have employees listed on their payroll.
The physical address of your business is a must when setting up this account. You need address proof to substantiate the address you are mentioning on the application form. This can be any utility bill, bank statement or a recent communication that carries your business address.
These are the most important requirements; however, they may vary from one bank to the other. It is always better to check with the bank about the documents they need in addition to the ones before you apply for the business checking account. Ensuring you thoroughly understand the features and benefits offered by the bank is also very important. Compare business checking account offers across various banks before making your choice. While some of them offer free checking account services, there are a few others that will charge you for their services. Make sure you thoroughly understand all details and make a well informed choice.