What You Need To Open A Business Bank Account – So, you’ve started your dream mission (claps and confetti cannons!). But now, it’s time to get your subscription out of the way. You may be asking yourself:

Some businesses are required by law to open a separate business bank account. Even if you are not legally required to separate funds, you may want to.

What You Need To Open A Business Bank Account

What You Need To Open A Business Bank Account

Whether your business legally requires a separate bank account for personal and business financing comes down to two factors: your business model and your name.

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A sole proprietorship is a business that operates separately from its owner. If your business is incorporated, your business is a separate legal entity.

Limited liability companies and corporations are separate legal entities. If you operate as one of these business models, you must open a separate business bank account.

Sole proprietorships and partnerships are not legally required to open a business bank account unless you have…

A DBA name is a fictitious name that is different from the legal name of your business (eg, the legal name Mark Smith / DBA Mark’s Mechanics). Many businesses tend to operate under the DBA name rather than their legal name.

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So, are you running a sole proprietorship or partnership? Do you work as a DBA (also known as a business name)? If so, you need a separate business bank account.

If your business is not structured as an LLC or corporation, and if you are not operating under a DBA name, you may be wondering,

Well, you might want to think seriously about redeeming a personal account regardless. There are a number of benefits you can get from opening a business bank account.

What You Need To Open A Business Bank Account

Imagine mixing all your personal and business transactions. You’ll waste time sorting through invoices and receipts when it’s time to update your books or file your taxes. Sounds like a recipe for disaster, right?

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Not to mention, opening a separate business account can help prevent any confusion from the IRS. To avoid IRS nightmares and unnecessary stress, learn how to organize business receipts and accounting books. If you are combining your business and personal transactions, make sure you have a paper trail to prevent any issues.

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All banks require businesses to provide some form of documentation when opening a business account. So, you need to gather information (aka, paperwork to prove you’re a legitimate business).

Depending on your bank’s requirements, you may need to provide different information to set up a business bank account. When researching your banking options, make sure you know what each one requires for opening a business bank account.

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The documents you need may vary depending on the type of business structure you have. Check the type of documents you need to provide, broken down by business company.

Opening a business bank account is a big step for your company. And, opening an account requires you to do some research and follow a few steps.

*Generally, you can choose to open an account in person or online. However, you must open your small business account as an individual if you are in one of the following industries:

What You Need To Open A Business Bank Account

Consider tracking your payments to make sure they’re going in and out of the right accounts. Catching issues early can prevent future financial disasters.

What Do You Need To Open A Business Bank Account?

Allows you to link your bank or credit card to automatically download transactions. Or, you can manually record the information using a journal. The choice is yours! Start your free trial today!

Get up and running with free payroll processing, and enjoy free expert support. Try our paid software for a free, no-obligation 30-day trial. Having established a new company, you may now want to open a corporate bank account in Singapore. In fact, it would be advisable to do it as soon as possible for practical reasons.

Opening a business bank account separates your personal and business finances (including your business assets, cash flow, expenses etc.), bringing potential benefits to you and your business.

For one, your business finances can be managed independently without including your personal finances. This would better protect you from any corporate debts that may arise in the future, as there is a clear separation between your personal finances and your business.

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On the other hand, if you use a single bank account to manage funds, you are essentially treating your business funds as your personal funds. In this way, you are at risk of giving away your personal money, for example, to creditors who may seek to pierce the corporate veil (ie hold you accountable for your company’s debts).

In addition, this type of account also allows you to monitor and evaluate your business performance accurately and conveniently based on records specific to your business.

The authorized signatories are those appointed to work on the account, and must be written by the decision of the board of the company, in accordance with the constitution of the company.

What You Need To Open A Business Bank Account

With so many popular banks in Singapore, how do you decide which bank to open your corporate bank account with?

How To Open A Corporate Bank Account In Singapore

Your task to decide is especially difficult as different banks offer competitive corporate bank account options, each with its own benefits and coverage.

Here are a few tips and tricks that can help you narrow down your options, referring to the services offered by several local banks – the following information provides a quick summary:

As a new business owner, you may be concerned about initial setup costs. The initial deposit required to open a corporate bank account ranges from S$0 to S$3,000.

This amount does not depend only on the bank you contact – each bank may offer different types of corporate bank accounts, which lead to different deposit amounts.

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When you look at how advance deposit amounts vary widely across the board and between banks, this shouldn’t be the only factor you should consider.

Instead, it may help to consider other factors before deciding which account to move forward with.

Besides the initial deposit, another important consideration will be the minimum balance to be kept in your bank account. This is because this can affect the cash flow and financial management of your business.

What You Need To Open A Business Bank Account

In addition, the reduction of the minimum balance amount leads to additional costs, which is not necessary for a new and growing business.

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As shown in the table, while DBS’ Digital Business Account does not have a defined minimum balance, there is a monthly fee of $18 charged to the account. On the other hand, the Aspire Business Account has no minimum balance or reduced fee requirements.

The type and nature of your business is also an important consideration in choosing your bank account.

If your business is likely to involve cross-border transactions, you may want to open a corporate bank account that allows foreign currency transactions.

As can be seen, the fees offered by each bank may vary. So, knowing the funds your business is dealing with is crucial when it comes to choosing a bank.

What Do I Need To Open A Business Bank Account?

If you have decided which bank to open your bank account with, it is time to apply for the account:

Step 1: Apply online or visit the bank to apply for opening a corporate bank account online

Some banks now offer 1-day account opening services that can be done online, increasing convenience for business owners like you.

What You Need To Open A Business Bank Account

Examples of corporate bank accounts that can be opened online include OCBC Business Growth Account, DBS Business Account, UOB eBusiness Account and Aspire Business Account.

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Therefore, if you are eligible to apply online, you can easily fill out the online form on the bank’s website and open your company within a day.

Some banks may require the presence of the director and authorized signatories of the bank to open a corporate bank account. You may want to check with the bank you are opening the account with for such requirements.

If you are opening a bank account online with a company or in person, depending on the bank, you may also be asked to submit additional documents.

As you may have already noticed, opening a corporate bank account can happen within a day, but it can also take weeks. This mostly depends on the time taken by the banks for verification.

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Generally, with proper documentation, the process should be effortless. Physical presence of directors and authorized signatories at the time of account creation can also prevent unexpected delays.

With Aspire, corporate directors can set up a new corporate bank account with no down payment, monthly fees, minimum deposit or down payment fees. Apply online – no need to go down to the bank – with your identity documents and create your bank account in minutes. Click here to learn more!

If you need help opening a corporate bank account for your company, please contact us for a quote.

What You Need To Open A Business Bank Account

The information provided does not constitute legal advice. You should get specific legal advice from a lawyer before taking any legal action

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