What is a bank account for business?
In business, one small mistake can cost you dearly. You may have suppliers and creditors coming after you and everything you own because you made one mistake. As a sole proprietor, you don’t like the veil between you and your business. The mistakes you make in one thing affect the other. But with an LLC, you enjoy protection from the corporate veil piercing. Your assets are separate from the company, and creditors and suppliers can only access what is in the company. However, there is a catch to this. It only applies if you can prove the separation not only on paper but physically. This means that you must also separate your money from the company by opening a bank account for the business. Opening this bank account for the LLC is a way to protect your assets by covering this veil that can now be maintained in court.
Why does an LLC need a bank account?
Most people open an LLC bank account because the law requires it. Without it, they risk losing their assets in the event of a lawsuit. But with a business account, they can prove that they are separate from the company, and it gives them protection. If you ever find yourself embroiled in litigation, you can turn to this corporate shroud. In addition, you can also open a bank account for the LLC to:
- It is much easier to balance your books without splitting the money. Most people rely on professionals to go through their business books and determine what they need to government.Hiring an accountant costs money, and the price goes up when there is no clear separation because the workload increases. If you want processes done quickly and at a lower cost, you may want to consider this separation. It can become such an easy task that even you can handle it without help.
- Appeal to credibility. Your appearance matters, and the more professional your transactions look, the more people will want to do business with you. People who work from home are more likely to need that appearance because they don’t have an official address. A bank account makes you look serious in your business dealings and can attract suppliers and investors who will want to do business with your company. If you manage your operations from home, you also start to look professional.
- Get a loan. You can’t tell how well your business will perform or if you’ll need additional financing at some point. You have to work on building a good relationship with the bank in preparation for any lines of credit. Your banker will analyze your past transactions and make a decision based on them. But without that understanding and history, the banker may not agree to the idea of financing your company. Some banks are clear about their requirements when dealing with companies and do not offer business-level services to people with personal accounts.
Best Business Bank Accounts
Not every good bank to open an account in Florida can work for you and you must understand what your company needs to make a good decision. When looking at options, consider the cost of maintaining the account, the services offered, accessibility of the location, the availability of online services, and the possibility of getting a loan.
To help you decide, you may consider:
- Bank of America – Best for a checking account
- Chase Bank – Best for checking and savings account
- Ally Bank – Best for savings account
- VyStar Credit Union – The best credit union
- First Florida Bank
- Suncoast Credit Union
- Discover Bank
- Capital One 360
Can I open an online commercial bank account in Florida?
Gone are the days when conventional facilities were most popular. With the ability to access almost everything over the phone, it makes sense to try an online account. Fortunately, you have a wide range of options, each with something unique to offer. Note that by using online banking, you may not get some of the benefits of being able to come to the bank and file a complaint if necessary. However, if you’re getting services in addition to the usual features, you may also have the option to take advantage of them. But if not, it helps to know how and when you can access services and if there is 24-hour tech support.
What do you need to open a commercial bank account?
Before you go to any institution, you should do your homework and find out what management will require of you. You can do this by calling ahead or even looking at reviews. Generally, you will need to provide:
- Employer Identification Number (EIN)
- Business registration documents
- Operating agreement
- Business license
- ID cards, at least one of which has a photo
The bank may require additional items depending on its management policies, such as an LLC resolution to open a bank account. Often only authorized members of your organization need to be present at the opening. But they will need permission from the other members to do so, which should be reflected in your operating agreement. If you have yet to create such guidelines, now is the time to do so, because this document is needed not only here, but also for other transactions.
What is the difference between a business bank account and a personal bank account?
The main difference is the type of money in both accounts. A personal account will hold the money you earn as profits from the business or any other transactions. For example, a company may have earned $10,000 in the last two months, and the members share that $1,000 profit each among the four members. That money belongs to you, not the entity, and you can keep it in your account. The remaining $6,000 belongs to the company and must remain in the company account.