When you set up an LLC (Limited Liability Company), you will automatically need to take care of the most basic paperwork, but that’s only the beginning. Depending on your personal and business financials, you may want to keep your business’s bank account separate from your personal finances.
Whether you’re the sole owner of your new business or the director of several LLCs for your company, an LLC bank account is one of the first things you’ll need to get set up and running.
This article provides some guides on how to open an LLC bank account and why to have it.
However, Before digging deeper into the topic, let’s first briefly learn about these Limited Liability Companies and find out how they are different from other business types. Check out the best bank accounts for LLC business.
What is LLC?
A limited Liability Company (LLC) is one form of business entity that can be established by one or more persons where its members are not personally liable for debts or other things. Although LLCs also have limited liability protection, just like in the case of corporations, the good part is that they do not provide as many documents as it is in the case of corporations.
You will need to fill out certain documents and send them to the appropriate buildings to get confirmed to start your LLC. One of those must-do steps for each LLC is setting up a bank account so that you can keep track of your money. This article will give you simple instructions on opening an LLC bank account in the state of your LLC’s formation.
What is an LLC Bank Account?
An LLC bank account is simply a bank account that you hold as the “owner”. It’s like a “personal savings account” for your business. You deposit money into it, withdraw it, and transfer money from it like any other bank account.
In some states, you can open and maintain more than one bank account for your LLC; but only one can be the “official” LLC bank account. This is so that you can track your money easily and maintain an accurate accounting of your LLC’s assets and liabilities.
Why have an LLC Bank Account
First, and most importantly, having a bank account for your LLC can help you manage your business’s cash flow. Whether you are depositing money into the account or withdrawing money from the account, it can help keep your business on track. This is especially important if you are the sole owner of your business. If you don’t have a good system for tracking your money and depositing each paycheck, then you might be risking tax fraud or filing an inaccurate personal tax return. Having a bank account can protect your business and your wallet.
How to Open an LLC Bank Account
Once you’ve decided on the type of bank account you want to create, contact your bank to find out what documents are necessary to open a business bank account for an LLC. You will almost certainly be required to present the following documents to your bank:
- Depending on the state where you registered your LLC, you will need to have a copy of your LLC’s articles of organization, certificate of formation, or a similar document.
- The federal taxpayer identification number of your LLC (EIN, or Employer Identification Number)
- A document that specifies who is allowed to sign on behalf of your LLC.
Some banks might have other requirements, so it is essential to call them before visiting to make the process even faster.
Once you are done with all the documents the bank needs, make an appointment to meet them to open a bank account for your LLC.
All in all,
Opening an LLC is not the hardest challenge you will have. However, it would be essential for you to research and find out whether LLC is the type of business entity that fits your business.
This article was an ultimate guide each LLC owner needs to know when opening a bank account for their business. We provided some of the must-need steps that are required when applying for an LLC bank account. Most of those steps are about getting the required materials, such as LLC articles, formation certificate, Employer Identification Number, etc.
