How to Open a Small Business Bank Account

By Cameron McCool on September 17, 2018

So you’ve figured out what kind of bank your small business needs.

You’ve scoped the best signing bonuses.

Now, how do you actually open a business bank account? What kind of paperwork do you need? We’ll walk you through it.

The paperwork you need to open an account

Before you head to the bank (or sign up online, if your bank offers that), you’ll need to gather the following documentation:

  • Your social security number.

  • Two pieces of personal ID.

  • A Federal Employee Identification Number (EIN). You can apply for one online. For sole proprietors, the bank may not require this. But registering your account with an EIN helps prevent identity fraud.

  • If your business has a name different from your own, a “doing business as” (DBA) certificate. You obtain this through a local, county, or state agency. The Small Business Association has more info.

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Depending on your business’s legal structure, you may also need to bring along the following, additional paperwork.

Sole proprietors

Sole proprietors usually only need the basics, listed above.

Limited liability companies (LLCs)

In addition to the minimum documentation to open a bank account, if you run an LLC, you’ll need:

  • Your Articles of Organization and LLC operating agreement. You would have received both of these when you formed an LLC in your state.

  • A partnership agreement, if multiple people run your LLC.

  • Any relevant business licenses—for instance, those needed to operate as a restaurant.

C corporations

In addition to the minimum documentation to open a bank account, if you run a C corp, you’ll need:

  • Your Certified Articles of Incorporation and Corporate Charter. You should have received copies of these documents when you incorporated your business.

  • Additional corporate documents identifying your contract signing authorities, if your Articles Incorporation don’t cover this already.

  • Copies of all relevant tax-exempt information, including your 501C letter from the IRS, if your corporation is a non-profit.

S corporations and partnerships

In addition to the minimum documentation to open a bank account, if you run a S corporation, you’ll need:

  • Your Certified Articles of Incorporation and Corporate Charter, if you’re an S corporation.

  • Additional documents identifying your contract signing authorities, if your Articles Incorporation don’t cover this already.

  • Copies of all relevant tax-exempt information, including your 501C letter from the IRS, if you run a non-profit.

  • A copy of your partnership agreement.

  • In some instances, a corporate resolution signed by all officers of your S corporation or partnership (ask a representative of the bank whether you need this).

Pro tip: call the bank to confirm you have all of the required paperwork before you show up for your first appointment.

Setting up an account to accept payments

If you’re planning to accept credit card payments for your business, you may need to set up an additional bank account, known as a merchant account.

The merchant account works as a relay point between your point of sale (POS) system, where you accept the credit card, and your business checking account, where the funds are deposited.

Most major banks will allow you to open a merchant account. To set up a merchant account, you can expect to pay a $50–$200 startup fee, in addition to transaction fees of $0.05–$0.50 on every purchase.

You can also open one through a credit card processing company, but there are a lot of factors to consider when doing so.

Also, you may be able to pay lower fees by working with services like Paypal or Square, or an online merchant platform like Shopify.

Not 100% sure what type of bank your small business needs? Check out How to Choose a Bank for your Small Business.

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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