Opening a business bank account is one of the first things to do after your LLC or corporation is approved, and one of the most common places new owners get stuck. Banks are required to verify who they are dealing with, so a business account takes more paperwork than a personal one.
The good news: with the right documents ready and a few answers prepared, it is usually a single appointment or a single online session. Here is what to expect.
Why a separate account matters
- It protects your liability shield. Mixing personal and business money is one of the factors courts look at when deciding whether to disregard an LLC's or corporation's separate existence.
- It makes bookkeeping and taxes cleaner. When every business transaction runs through one account, deductions are easier to support and tax prep is faster.
- It looks professional. Customers pay your business, not you personally, and your records show it.
Documents banks usually ask for
Requirements vary by bank and by entity type, but expect most of the following.
Your formation document
Bring the state-approved version of your articles of organization (sometimes called a certificate of formation) for an LLC, or your articles or certificate of incorporation for a corporation.
Your EIN confirmation
Most banks want the IRS notice confirming your Employer Identification Number. When you apply online, the IRS provides a confirmation notice (the CP 575) you can download and save. If you have lost it, you can ask the IRS for an EIN verification letter (the 147C). Some banks let a single-member LLC use the owner's Social Security number, but many require an EIN. If you still need one, here is how to get an EIN for free.
Ownership and authority documents
- For an LLC: your operating agreement, which shows who owns the company, in what percentages, and who can act for it.
- For a corporation: your bylaws, plus a board resolution authorizing the account and naming who can sign.
Some banks have their own resolution or authorization form that you complete during the application.
Identification for owners and signers
Expect to show a government-issued photo ID for each person who will sign on the account. Federal anti-money-laundering rules also require banks to identify and verify the people who own and control a business customer, typically each person who owns 25% or more of the company plus at least one person with significant management control, such as a managing member or CEO. Have each person's legal name, home address, date of birth and Social Security number (or other ID number) ready.
Items some banks also ask for
- A certificate of good standing, especially if your company was formed in another state
- Proof of foreign registration, if you formed in one state and operate in another
- A DBA or assumed name filing, if you will operate or accept payments under a name other than your legal name. Here is what a DBA is and when you need one.
- A local business license
- Proof of your business address, such as a lease or utility bill
- Your website or a short description of what you sell
Questions to expect
Banks also ask how you plan to use the account. Common questions include:
- What does the business do, and who are its customers?
- How much do you expect to deposit and withdraw each month?
- Will you deposit cash, and roughly how much?
- Will you send or receive international wires or payments?
- Where is the opening deposit coming from?
Answer accurately and realistically. Banks monitor accounts against the activity you describe, and large unexplained differences can prompt questions, reviews or, in some cases, account closures. If your business changes significantly, tell the bank.
Choosing where to bank
The right choice depends on how you handle money day to day. These are general patterns, so compare specific offers.
| Traditional bank | Credit union | Online bank or fintech app | |
|---|---|---|---|
| Branches | Usually | Often local | Usually none |
| Cash deposits | Easy at branches | Easy at branches | Limited, sometimes through retail partners for a fee |
| Monthly fees | Common, often waivable with a minimum balance | Often lower | Often low or none |
| Loans and credit lines | Strong option as you grow | Often available | Varies |
| Deposit insurance | FDIC | NCUA, at federally insured credit unions | Through a partner bank's FDIC coverage, where offered |
| Getting started | In person or online | Membership eligibility required | Online, often fast |
Understand your deposit insurance
At an FDIC-insured bank or a federally insured credit union, deposits are insured up to $250,000 per depositor, per insured institution, per ownership category. An account owned by your LLC or corporation is generally insured separately from your personal accounts.
Many fintech apps offering business accounts are not banks themselves. They hold customer deposits at partner banks. FDIC insurance protects you if an insured bank fails, not if the nonbank company fails, so ask which bank actually holds your money and how coverage applies.
Fees and features worth comparing
- Monthly maintenance fees and how to waive them
- Limits on free transactions or deposits
- Cash deposit fees
- Wire and ACH transfer fees
- Overdraft policies
- Connections to your accounting software and payment processors
- Additional users and permission levels
- Mobile check deposit
- Interest on balances
Snags that slow approval
- Name mismatch. The legal name on your state filing, your IRS records and your application should match exactly, including "LLC" or "Inc." and punctuation.
- Address problems. Some banks will not accept a PO box, or certain virtual addresses, as your business address.
- Timing. A brand-new company may not appear in every verification database right away. The IRS notes that it can take up to two weeks for a new EIN to become part of its permanent records, so a failed check in the first days is often a timing issue.
- Missing people. Every required owner and signer may need to complete identity verification before the account opens.
- Out-of-state companies. If you formed in one state and bank or operate in another, you may need proof of foreign registration and a certificate of good standing.
- Owners outside the US. Founders who live abroad often have fewer options and may need to verify in person or use a bank that serves international clients.
After the account is open
- Route everything through it. All business income in, all business expenses out. Get a business debit or credit card so you never reach for a personal card.
- Pay yourself the right way. With default LLC taxation, owners typically take draws. If your LLC is taxed as an S corporation, owner-employees are paid through payroll, with distributions on top. Here is when an S-Corp election makes sense.
- Connect your bookkeeping and reconcile the account every month.
- Keep the bank updated when owners, signers or your address change.
If you have not formed your company yet, our Advanced plan ($249/yr plus state fees) includes an EIN and an operating agreement, two of the documents banks ask for most. See pricing for what each plan includes.
The short version
Bring your state-approved formation document, your EIN confirmation, your operating agreement or bylaws with a resolution, and photo ID for every signer, along with the personal details of each owner the bank needs to verify. Be ready to explain what the business does and how much money will move through the account. Choose between a traditional bank, a credit union and an online option based on cash needs, fees and future borrowing, and confirm how your deposits are insured. Then run every business dollar through the new account from day one.
This article is general information, not legal or tax advice. For decisions about your situation, talk to an attorney or a tax professional.