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GM professional accountants How to Open a Limited Company Bank Account August 11, 2017
How to Open a Limited Company Bank Account Why a Limited Company Account? Though it is not mandatory to open a separate limited company bank account for your organization, it makes the bank transactions a lot easier in the long run. Using a different business account allows you to distinguish personal finances from the company’s. Otherwise, different problems may arise. For example, since having company money in your account is taken as borrowing from the company, the account will be in credit; this can cause increased tax liabilities. It may even be illegal to borrow money from the company. Certain tax benefits intended for businesses may not be provided for such accounts as it may be said that the money (and the charges paid for it) is not in the company’s name. Another potential hazard may occur if the company becomes insolvent and had an overdraft that could fall onto the shoulders of the person whose account is being used.
Steps to Opening a Business Account • Let’s start at the very beginning and assume that you are thinking of creating a limited company. The first step would be to open the company. • Next, you will have to get the Certificate of Incorporation, which is a license granted by the government and allows you to form the organization officially. This certificate is issued after the company is active and may take a while to obtain. • Select a bank where you will open the limited company account and book a meeting with them. • The meeting requires you to show documentation proving your identity and address, where you have to fulfill the bank’s requirements in order to be able to open the account.
Bank Requirements Banks will ask you to provide the following documents: (Note that people applying from other countries to the UK will have to give notarized translations of their national ID, and other documents) • Passport, national ID, or a driver’s license with photo – this proves identity and will be required of all the named company directors