What are the requirements to open a business bank account?

What are the requirements to open a business bank account?Whether you’re a brand-new start up working from your garage or a massive, multinational company, one thing unites you: you’re going to need a business bank account – but what do you need to open one in the UK?

It can sometimes seem like an insurmountable task to get all your affairs sorted, go down to your local branch, and actually open an account. There’s all sorts of hoops you need to jump through, which can all too easily become quite overwhelming – especially since each bank seems to need different things to satisfy their criteria – but there are several things that are universal when it comes to opening a business bank account.

Plan ahead for success

No matter where you go to open your account, you need to do your homework before you step inside. Yes, there’s the initial bit where you need to select your bank and the type of account you’d like to open, but beyond that you’re going to need several things sorted before you actually go and take the plunge into the business banking world.

You’re going to need to sort out the details of your business and the types of things you’re going to undertake while going about your work. This includes sorting important things like where your firm’s start-up finance is coming from – which can be from a business plan, other investors, or from your own savings – and whether you’ve gone and secured a certificate of incorporation if you’re a limited company.

Identity is key

More importantly, you’re going to have to make sure that your bank can trust you’re not just some bloke off the street – you’re going to have to show proof of identity, and there are many different documents you can proffer to prove to the banking authorities that you actually are who you claim to be. This may see a bit odd, considering you’re standing right there and you’re obviously a real person and not some figment of your banker’s imagination, but it’s important to provide verification in order to prevent any accusations of fraud.

You’re going to need an acceptable form of ID, such as a passport or driving licence. Along with that, you’re going to need an official document that has your address listed, such as a recent utility bill – these are all important for banking records – and be prepared to have anyone else who’s managing the business provide you with proof of address and identity as well.

For limited companies, this becomes a bit more complicated, as you’re also going to be required to provide the same details for any company secretaries and directors. This isn’t just a good idea, it’s the law; banks have very strict money laundering regulations that they need to comply with, so they’re not just giving you a hard time – they’re making sure they don’t get in hot water themselves!

Sign here please

Finally, you’re going to have to provide a sample of your signature to the bank so they have something to check against whenever you come in to sign on the bank account. Again, you’ll have to provide this same detailed information on everyone working for your business that will have the same permissions, complete with a whole stack of signature samples for each and every one, and you also may need to tell the bank who should be authorised to sign on certain banking activities, such as cheques that require the signature of more than one business owner or manager.

It’s quite a bit to get taken care of, isn’t it? At least it’s less Byzantine in its complexity than you most likely thought at first; yes, the red tape may take a while to get through, but a little tedium shouldn’t stand between your firm and a new business bank account, should it?