There is no legal requirement to open and operate a business bank account for a limited company. However, you will find it very difficult to trade and manage your business successfully without one. A separate account will allow you to effectively record and trace all business income and expenditure.
If you use a personal account for business purposes, you will find it increasingly difficult to distinguish your company’s finances from your personal finances. This will simply cause unnecessary confusion and delays when you’re preparing annual accounts, working out tax liabilities and reporting business activity to HMRC and Companies House.
How to open a bank account for a limited company
The process of opening a business account for a UK company is very similar to opening a personal current account. It’s normally a straightforward process if the company has UK-resident directors and shareholders.
Rapid Formations offer a wide choice of free business bank accounts (see below), including Barclays, Cardone, TSB and Mettle, which you can pick up during the company formation process. Once you have chosen your preferred business bank account, we will send the details of your new company to the bank and take the hassle out of the job. Our banking partners do not require you to appear in person at the bank and onboarding is done very quickly and easily online using websites and apps. Some banks like Cashplus do not require a credit check.
If you choose to go it alone and open your business account yourself, you will have to make your own application from scratch, which will more than likely be online. Some of the more traditional High Street Banks will require the account signatories (the individuals who will be authorised to access and use the account) to provide identification and proof of address documentation – in person at the branch.
PLEASE NOTE: If you are an undischarged bankrupt or a disqualified director, you may not be permitted to open a business account for a limited company.
When choosing who to bank with, most people usually try their own bank first. This is a great idea but it’s worth shopping around to see if you can get a better deal anywhere else. Some of the important factors to consider when you are looking for a suitable account include:
- Account charges and fees.
- Recommendations from other companies or an accountant.
- Does the bank provide a telephone banking service?
- Is there an online banking option?
- What are the interest rates, if any?
- Are any incentives offered?
What can I do if I am not a UK resident?
Non-UK residents can easily register a limited company in the UK, but it is more difficult to set up a UK business bank account. This is because many banks require the account holder(s) to reside in the UK. Rapid Formations has partnered with TransferWise to provide our non-UK resident customers with a UK business banking solution. You will be provided with a UK business bank account number and sort code, as well as Eurozone, US and Australian bank accounts at the same time.
A TransferWise business account enables you to receive money for free, and hold money in over 40 currencies. We have included a free TransferWise business account within our Non-Residents Package, ideal for non-residents looking to form a company with UK business banking.
Another option for non-UK residents is to open a bank account in their own country. Banks overseas normally require ‘Apostilled Documents’, which prove the authenticity of UK company documents via a legalisation procedure involving the Foreign and Commonwealth Office. Rapid Formations offers an Apostiled Documents Service for a cost of £89.99 plus VAT per document.
Our business bank account offers for UK residents
Rapid Formations provides new clients who reside within the UK with a choice of up to 8 business bank accounts from our banking partners.
Customers are able to pick up a business bank account during our online company formation process – simply select a package and the rest is easy. Please find below a list of our current banking partners:
Barclays provide our customers with a Business Bank Account, with 12 months’ free business banking. Once your company is formed, simply fill in an online application form, and your bank account will be opened within 5 working days.
TSB provide our customers with a Business Bank Account from a high street bank. Your business bank account will be set up within 5 working days, once you have completed a simple online application after your company has been formed.
Mettle (by Natwest) provide an online business bank account, which allows our customers to add receipts to transactions and create invoices with company logos, via their App. Just complete a quick online application form and your business bank account will be set up within minutes.
Cashplus offer an online business bank account for our customers, with no credit checks. As soon as Cashplus have verified your details, you will be sent your unique Account Number and Sort Code so you can start receiving payments. Your Mastercard Business card will arrive within 5 working days.
Choose a business account from our banking partner Revolut, and benefit from built-in budgeting via their App. Simply complete a brief online application and your bank account will be opened within minutes.
Countingup offer an online banking solution which categorises your income and expenses automatically via their App. Complete a short online application and your business account will be opened within minutes, and your contactless bank card will be sent once you activate your account.