If you are an entrepreneur, you need to keep your business income separate from your personal ones. For this purpose, it is necessary to open a corporate bank account in the name of your business to conduct all your transactions. This rule applies to any business, with no difference in its nature, size, operations, or type of offers.
A corporate bank account also refers to as a business bank account, means an account in a banking institution that a business sets up to manage its finances. Companies use corporate accounts for investment and saving purposes and their everyday financial needs. No matter what is the size of your business, having a corporate bank account is significant for all business owners. We’ve already considered reasons why you shouldn’t use your personal accounts for business. In this overview, let’s take a look at the main features of corporate accounts.
If you are a small firm or receive payments from clients, you should open a business bank account as it provides many advantages to business owners via the banking services they deliver.
Each business and corporation is deemed to be separate legal entities from their owners. Thus, if you have a corporate bank account and your business fails, you are not personally liable for any income loss. This way, keeping all your business monies apart from your personal finances creates a layer of protection for your personal funds and business as a whole. As a result, you won’t bear responsibility, and neither will your assets be taken away if your business goes bankrupt.
A business bank account is handy when completing tax returns as you can precisely see your inbound and outbound payments. You do not mix up personal and business expenses and have an accurate tax return.
It is often the case that personal bank accounts feature certain terms and conditions regarding using a bank account when you sign up with them. Such limitations are effected on using your personal bank account to make business transactions. To avoid additional questions from banks, it makes sense to keep your business expenses separate by using a business bank account.
Having a separate account for business establishes your company’s credit score. Indeed, the situation with business credit scores looks to be the following: if you don’t have a business account, you will have to rely on your personal credit rating, which can make things difficult when looking to secure a loan for your business. By using your corporate bank account for all financial operations, you slowly build a credit history.
Running your spending and budgeting is more smooth when a business has a separate bank account. The reason for this – is all reports and bank statements only include your business and no other money like personal. This not only clarifies but also facilitates showing the true financial picture of your business.
Setting up a business bank account often comes with some pitfalls that may not be something you’ve faced when establishing a personal account. From the banks’ side, special attention will be given to risk assessment, there will be requirements to submit much more documents, and will often interview to determine your business profile. Therefore, things you need to consider before applying for a corporate account, are the following:
As a rule, banks take maintenance fees for a corporate business account, such as a monthly service fee. Sometimes, banks may charge an account opening fee subject to their offer, or ask for an initial deposit. Charged can be transaction fees each month as well as early termination fees if you choose to close your corporate bank account. In addition, you need to be mindful that there are some flat fees for ATM cash withdrawals and limits on how much you can withdraw per certain period. Hence, subject to the nature of your business and how you intend to run it, you should check which bank’s corporate account fee terms and conditions are most suitable for your business.
There any many external benefits that come with setting up a commercial bank account with a specific financial institution. The services and advantages provided are what differentiate them from one another and can assist you to make a final decision.
Prior to opening any corporate account, you should make sure that the bank you becoming a client of which is part of a secure banking system and has insurance for all types of deposits opened there. This is highly significant for a corporate bank account because if your bank fails, you would not want to risk your business and zero all your earnings. Subject to the jurisdiction where you are serviced, you could be protected by the government insurance program.
Prior to applying for a business bank account, it’s your responsibility to find out which documents are mandatory to open an account. Generally, banks ask for the business’s legal name, its nature, proof that your business is legal, contact data, your business documents, etc. The package of documents may vary subject to the legal and organizational structure of the company. Also, the list of these documents required may differ from institution to institution so you should decide which bank is more attractive to your business to set up a corporate account with.
We support all major currencies, such as: EUR, USD, GBP and others. The availability of multiple currencies is provided by our corresponding partners worldwide.
Unfortunately, within Payscrip system the personal bank accounts are not supported, however we serve businesses of all types.
Our platform uses SEPA (1-2 business days), SEPA INSTANT (immediately), SWIFT (1-3 business days) and other payment schemes in order to perform transactions.
You can inject the funds using a direct wire transfer from your accounts, or may wish to connect other accounts maintained by 3rd parties using our Open Banking functionality.
Payscrip implements a KYC process to ensure a safety of the clients’ funds stored at our platform. During the registration process it will be required to provide: corporate documents, personal information and documents of the management of your business and the beneficiary, financial information about your business and your cashflow (projected and current).
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