When doing business in the United States, it may not be necessary to open a bank account for your business, although experts certainly advise that you do so, for several reasons.
First of all, it allows you to do business in a much more streamlined manner, as financial transactions become easier. Secondly, your personal and business finances are separated, and you can have great insight into accounting. Third, and arguably equally important, it lends your business more credibility. Lastly, there are so many great options to choose from. Small businesses can compare and contrast banks such as found vs lili, talk to them about their specific needs and figure out banking solutions that provide a great financial foundation for their business.
There are alternatives, of course, and they are hit-and-miss depending on where you go and who you decide to build a financial relationship. But, should you choose to open an account, you will have to prepare some paperwork and fulfill some legal requirements. Here’s a look at what you need to open a US bank account for your business.
IDs and licenses
The first thing you will need to open an account is a proper identification document – a card or a passport that is accepted by all government institutions. However, you’ll also need to present permits and licenses if your business requires these.
Your TIN, EIN, and more
Expect to be asked to present a Tax Identification Number (TIN), and a name registration. If you are planning to hire employees, you’ll also need to secure an Employment Identification Number (EIN) – and this will be coupled with a SSN (social security number). They are mandatory also for setting up payroll accounts.
Different banks may have different regulations, but when it comes to business accounts, you will surely be expected to present your business registration (sole proprietorship, partnership, limited company, or corporation).
Cash flow projections
Though this is not required by many banks, it often helps to present the bank with a projection of future cash flow. It will show the bank that you are serious with your business and it will help them advise you on what kinds of accounts you may need. It’s also very helpful for credit lines in the future.
Can you do it online?
Often an account can be opened online, which can save a lot of time and money. However, by doing it in person, you may be offered many more benefits and are able to receive more expert advice.
If you do choose to open a business bank account in the US, remember to do it well – avoid common mistakes such as giving wrong, misleading, or incomplete information; choose your bank wisely (as the bank you select may not be suitable), and if you are thinking about a checking account, make sure you order the right one and have a check-signing authority system in place. Also, don’t forget you’ll have to maintain a minimum balance. Your US bank account can be an invaluable asset for business, but you have to fulfill some important requirements to get it and to maintain it.