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While many people turn to their usual bank when opening a business account, shopping around is advised. There may be some advantages to using the same bank for both personal and business accounts – your manager may be more supportive if you are known to the bank and have a strong financial background. However, each bank offers different services and has different bank charges.

Many banks currently offer free business banking services for a fixed period – six months or a year – as an incentive. There are also a variety of support packages, such as free business software and dedicated advisors to help you with your business plan. Choose a bank that will offer the best overall deal for your particular business – you may also want to consider business ethics and ethical banking when deciding which bank to entrust your business to.

Choose your accounts

Depending on the type and size of your business, you may need different accounts. If you’re likely to transact frequently, for example, it may be better to have an account that charges a flat monthly fee, rather than a per-transaction fee. If you need to process debit and credit card payments, you will need a merchant account.

For overseas trading, you may want a foreign currency account. As with personal accounts, it may be worth having more than one type of account – for example, a checking account for day-to-day banking and a deposit account for investing profits. There’s nothing stopping you from having different accounts with different banks – although you may get a better deal if you hold all your accounts with one.

Opening your account

You will need to make an appointment with a business advisor to open an account. In order to prevent money laundering, you will be required to provide certain information at this stage, including proof of identity such as a driver’s license or passport, and proof of your address and signature. The advisor will want to see a business plan and details of your financial planning. There are many programs that offer assistance in developing a business plan. Make sure you have as detailed a plan as possible when presenting it to your advisor, this will help them provide you with the best services for your needs.
You will also need an account opening mandate – the bank will provide this to you.

For LLCs, you will need a certificate of incorporation.

By Joseph Kenny

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