For many, starting a business is a dream come true. Whether you are looking to provide your hometown with locally made goods or venturing into the agriculture business, becoming your own boss is a feeling unlike any other.
If you are in the process of lifting your startup business off the ground, you are most likely using your personal funds to get things going. In fact, Small Business Trends reports that personal funds account for more than 77% of small business financing methods. Talk about a lack of a financial work-life balance!
With many new small-business owners funding their dreams out of their own pockets, personal finances and work finances are becoming increasingly intertwined and difficult to keep track of. If you are using your personal funds to grow your business, it might be time to ask yourself if a business bank account is right for you.
At Landmark National Bank, we know the drive, commitment, and hard work it takes to get your small business up and running, which is why our friendly associates are here to answer a common question new business owners ask: Do I need a business bank account for my startup?
What is a business bank account?
Business bank accounts are like personal accounts, but they allow you to separate your finances and keep track of business-related expenses and transactions. These accounts let you take control of business’ cash flow, showcase your professionalism when customers pay you, and ensure you stay protected and legally compliant.
Am I legally required to open a business bank account?
Depending on what type of business you have, you might not be able to have a combined account for personal and business finances. If your business operates under a Doing Business As (DBA) name (a name that’s different from your name or from the legal name of the partnership, LLC, or corporation) you are legally required to open a business bank account (e.g., if your legal name is John Smith and your business operates under the name Smith Plumbing). Additionally, if you operate as a limited liability company (LLC), you must open a separate business bank account.
If you are in a partnership with a DBA or a sole proprietorship, you are not legally required to have a separate business bank account.
What are the benefits of business checking and savings accounts?
When it comes to separating your business and personal finances, there are many benefits that positively affect your business’ bottom line. Regardless if you are legally required to open a business bank account, having one will ensure you stay on top of your expenditures and payments received. Other key benefits include:
- Precise accounting records
- Accurate tax filings
- Detailed records and receipts
- Better business budgeting
- Clear growth opportunities
In addition, some business bank accounts are interest-bearing, meaning you can earn passive income at competitive rates.
What is required to open a bank account for my business?
Unlike opening a personal bank account, business accounts normally require a few additional documents. Common documentation requirements include:
- Social Security Number (SSN) if you are a sole proprietor or Employer Identification Number (EIN)
- State-issued Driver’s License or ID
- Business license
- SS4 IRS Notification Letter
- Article of Organization (for an LLC) or Articles of Incorporation (for corporations)
Open Your Business Bank Account at Landmark National Bank
At Landmark National Bank, we want to help you and your business succeed. No matter what your dreams are, our selection of business bank accounts will help you separate your personal finances, focus on the growth of your startup, and plan ahead for business opportunities. Plus, with our online and mobile business banking tools, you can view your statements, transfer funds, and pay business-related expenses all from your smartphone or tablet.
If you are ready to take your new small business to the next level, don’t hesitate to contact our experienced business banking associates today to find out what account is right for you.