Is your limited company among the 672, 890 companies registered between 2018 and 2019 in the UK? Do you have a business bank account yet? Well, saving money in your save box at home or office is not safe, especially when you're running a limited company. First, that's a lot of money to keep in your safe. Secondly, when an emergency catches you, you're likely to use the business money, thus, loss.
So, Is It Necessary To Have A Business Account?
Several factors determine whether you need a business account. But, if you’re running a sole company or partnership, you might not need a business account. In this case, you can save your money in your bank account. However, this might lead you into trouble when the bank realizes you’re using the account for business.
On the other hand, when you register a company as limited, the law takes it as an individual entity, and therefore, it needs its account. For instance, if your company name is Q&S, the business bank account name will have the same name.
How Will You Open A Business Bank Account?
A business bank account is expensive than personal account because it has monthly and transaction charges which are higher than a personal account. You, therefore, have to provide your details along with the company’s details to make the banking process a success.
So, where will you start when opening a bank account? First, you need to understand that you’ll have to go the bank branch to complete some account transaction even if you’re registering for details online. Therefore, consider choosing a bank that is near you. So, list down all the banks around your business and evaluate their charges. You can do this by going through their websites or calling each of them.
Ensure you note down everything because it will help you make an informed decision. Once you pick the best out of your list, open a business bank account with them? What
documents will you be asked to provide? Well, the opening of bank requirement varies from bank to bank. However, the primary documents you’ll be asked to provide include;
- Your UK photo driving license or passport to prove you’re a citizen of UK
- Your address. In this case, you can provide a utility bill document, mortgage statement, tenancy agreement, and council tax bill or bank statement. Ensure the report possess the latest date.
- What is your company’s registration number? Well, you’ll need to provide it along with the business name, address, and contact details.
- Your annual turnover. This is the estimated amount you expect to pass through the business bank account you’re opening.
How Did You Choose The Company To Transact With Above?
Choosing a bank to transact with is a personal decision, but you need to evaluate several factors so that you come up with the best. Here are questions you need to ask yourself when eliminating the banks on your list.
- How will you be banking? Thanks to technology, you can now do your banking via an app. However, some banks don’t allow you to use an app to transact, or if they do, the app is inconvenient. If you want to bank online, check the reviews of the app, and evaluate whether it’s convenient for you.
- Are you planning on doing an international transaction? If your bank doesn’t offer foreign exchange deal, it means you’ll have to pay more while transacting internationally.
- How will you pay or get paid? Often, when transacting online, you don’t have to pay for charges. However, opting for cash and cheque transaction means you’ll have to pay. Compare the online and cheque/cash fees and choose a bank offering the best deal.
- What is the bank offering? Some banks will offer you free business coaching, interest on your balance, and more. Choose a bank that offers the best bonus benefit.
Advantages of Having a Business Bank Account
1. To Avoid Trouble
As earlier mentioned, saving business money in your bank account can lead you into trouble with your bank. Instead, of leaving in fear of the bank discovering you’re doing a business transaction with your account, open a business bank account.
2. Your Company Will Look Professional
Imagine your customers paying through your account only to realize it’s under your name and not company’s. It looks unprofessional. But, if you open a business account, your client will transact with the company’s name, and it will be like marketing your business name indirectly.
3. It’s Convenient
Are you ready to separate business transaction from personal if you’re using a personal account? Well, save yourself the trouble and open a separate bank account for your company.
Open an Account for Your Business
Indeed, having a business account is an ideal option. To get the best, you need to research all banks so that you choose the best that’s in line with your goals and lifestyle. So, what if you have an account already, but it’s not satisfactory? Well, you can open a new account with another bank. But, you have to
be honest with your new bank when they ask if you have another account.