If you own a business, you’ll need a business bank account. A personal bank account should only be used for company reasons if you are not an LLC or incorporated. Why? Because you will be able to keep your professional and personal lives properly separated. This is required for record keeping, and the IRS expects you to keep accurate business records.
If you’re starting a home business in a basic industry like crafts, local contract work, or something hobby-related, you might start with your own bank account. However, because you must comb through your accounts to identify business-related expenditures, you will find that filing taxes is considerably more complex. You should track your revenue and expenditures over time to see how far you’ve gone and how near you are to meeting your income and business goals.
I needed a business license from my municipality in order to open a business checking account in the United States. Go to your state’s website to find out what you need to do to get a business license.
This is something people don’t get sometimes, if you own a corporation or a company with several owners, you should keep your personal finances separate from the company’s. A loan or the acquisition of extra shares in the company are the most common ways to infuse cash from your personal account into such businesses.
To properly keep my company assets separate from my personal ones, I also had to learn to do some extra bookkeeping.
While the criteria for opening an account vary by country, the most important requirement is that you can demonstrate that you have cash or liquid assets. Higher-risk business accounts may require the completion of certain specific banking paperwork.