What You'll Need to Open a Business Bank Account

Opening a business bank account requires more effort than opening a personal account – there are documents that need to be gathered, names to be determined and licenses to get in order – but all the work is worth it.

Benefits of a business bank account

According to the U.S. Small Business Administration, most business bank accounts offer benefits and perks that personal bank accounts do not.

Protection – Business banking helps protect your company by keeping business funds separate from your personal funds. Merchant services also provide purchase protection for your customers and protect their personal information.

Professionalism – A business bank account allows checks to be made out to the business, customers to pay with credit cards, and employees to handle banking tasks on behalf of the business.

Preparedness – Some business bank accounts come with an option for a line of credit that you can use in an emergency.

Purchasing power – A business account allows you to build a credit history for your fledgling business.

Before you apply for a business bank account, however, make sure you have all your documents and information together. This will help the process move forward quickly and more smoothly.

Here is everything you'll need for a business bank account:

Doing-business-as name (DBA)

A DBA, often referred to as a "fictitious name," allows you to conduct business "like marketing or advertising, or accept money under a name that differs from the existing name of your business," said Deborah Sweeney, CEO of MyCorporation.com. Sweeney added that most banks require a certified copy of a DBA to open a business bank account since entrepreneurs aren't allowed to use their personal accounts under their business name.

Employment Identification Number (EIN)

If you're a sole proprietor, you will need an EIN, your Social Security number, and a driver's license or passport. These are used to prevent identity theft, fraud, terrorism, laundering, etc. While some banks allow sole proprietors to open accounts without an EIN, it's still a good idea to create one.

An EIN is an integral tool for managing taxes and paying employees. Sole proprietors may use their Social Security number for business tax purposes in lieu of an EIN.

Articles of incorporation

Articles of incorporation show the bank how the business is structured, and you use them to register your business with the state and other entities.

Business licenses

Regardless of business entity, banks will generally ask for your current business license to prove you are legally permitted to conduct business in your region. This also ensures that your business is accountable for all actions taken – including taxes and finances. Check with your state, county and local governments to determine if you need any licenses to operate your business.

Identification documents

As with any bank account application, you'll need to provide documents proving your identity.

Forms of proof can include a government-issued picture ID, such as a driver's license or passport. This is used in order to corroborate that the business owner is indeed the person who owns and/or runs the corresponding business.

Things to consider

Remember that there are many options available for business owners and that every bank will offer something different. Take your time in perusing the various options until you find the right one for your business.

You should also be aware of fees. Every bank will have a different set of fees and features – business accounts typically have higher fees and minimum balance requirements than personal accounts.