What is Corporate Bank Account?

What is corporate bank account?

A business or corporate bank account works the same as a personal bank account, it may have checking, savings, credit and merchant accounts. However, the purpose is for a corporate entity to have its own finances without being mixed to the owner(s).

What are the benefits of a corporate bank account?

There are many benefits to a corporate bank account, here are a few:

Protection: Banking as a business offers a limited liability protection to keep the business funds separate from your personal funds.
Professionalism: As a business grows the perception that costumers have is extremely important, with a corporate bank account costumers will be able to pay the owner(s) with checks, debit, and credit cards directly to the business instead of the owner(s) personal account.
**Purchasing and Credit Power: **Having a credit card account helps stablish a credit history in your business, this way the business can be truth worthy and have more purchasing power when dealing with banks.
**Taxes: **A lot of expenses can be classified as a business expense and this way an owner can save on taxation.
**Organization: **A business account provides a clear picture of the profit, loss of the business. Finances don’t get mixed with personal.

Things to consider:

When opening a corporate bank account there are things that an owner must consider.

Business checking and saving:

Intro fees
Interest rates
Interest rates for lines of credit
Minimum account balance fees
Transaction and early termination fees.

Merchant services:

Discount rate: Percentage for every transaction
Transaction fees: the amount for every credit card transaction
ACH daily batch fees: Fees charged for settling transactions for a day.
Monthly minimum fees: Fees charged if monthly requirements are not met.

Requirements needed for opening a corporate account:

Select a business structure (LLC, Corporation, partnership, sole-proprietor)
Business must be stablished in department of corporation of state (Ex: www.sunbiz.org in Florida)
Request Tax ID. (EIN for LLC’s and Corporations or social security for sole proprietors)
Create an operating agreement (If necessary)

With all the information presented considered, the business owner(s) should go to a bank and be able to open a bank account for their business.

Resources:

What is Corporate Bank Account?