What do I need to open a business bank account?
BankingFormationEIN
A bank wants proof that the company exists, proof of its tax number, proof that the person opening the account is allowed to, and the identity of everyone who owns a quarter or more of it. Bring all of it and the account opens in one sitting. Miss one item and it does not.
What they ask for
- The formation document with the state's filing stamp, not the draft
- The EIN confirmation letter, called a CP 575, or the IRS's replacement 147C letter
- Bylaws for a corporation, or the operating agreement for an LLC
- For a corporation, the board consent naming the officers and authorizing the account; an operating agreement usually covers this for an LLC
- Government ID for each signer and for each individual who owns 25% or more
- A beneficial ownership certification, listing each individual with 25% or more of the equity and one individual who controls the company
The last item is a federal rule, not the bank's preference: FinCEN's customer due diligence rule defines a beneficial owner as anyone with 25% or more of the equity plus one person with significant control, such as an executive officer, and every bank collects it. Some banks add a certificate of good standing for a company more than a few months old, and some want the foreign qualification if the company operates in a state other than the one it formed in.
Fintech or bank
Online business accounts open in a day from uploaded documents, and the deposits sit at a partner bank that the account provider names in its terms. A traditional bank takes longer and often wants a branch visit, and in return there is a person to call when you need a loan, a letter or a wire released. Founders without a Social Security number or a US address should pick the bank before forming, since many providers will not open the account without one. Either way, open the account before the first customer pays, so nothing runs through a personal one.
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Written by the lawyers who built Arabella. This is legal information, not legal advice for your situation, and reading it does not make us your lawyers. For a real dispute or a high-stakes decision, talk to a licensed attorney. More questions.