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.
You will have to complete an application form and provide the bank with your company name, registration number and other business details. Some banks may ask you to provide copies of your incorporation documents to prove that your limited company exists.
The account signatories (the individuals who will be authorised to access and use the account) must provide identification and proof of address documentation. The bank will also carry out routine credit checks on all account signatories to ensure they are suitable candidates for accessing and managing business funds.
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 business bank account. This is because many banks require the account holder(s) to reside in the UK. Please click here to find out more about bank accounts for non-residents.
Our business bank account offer
Rapid Formations provides new clients with the option of a free business bank account from Lloyds. The account is available to any client who registers a limited by shares company with UK-resident directors and shareholders, or a Limited Liability Partnership with UK-resident LLP members.
What does this bank account offer?
Lloyds provides the following services and benefits:
- Free business banking for 18 months.
- Online and mobile banking options.
- Support from the Lloyds Business Management Team.
- Free 30-day trial of Lloyds Business.
- Access to in-depth guides for new businesses.
- Range of Monthly price plans or new tariffs at the end of your free banking period.
When your company has been set up, we will send your details to Lloyds. They will contact you within approximately 48 hours to arrange a meeting with a business banking manager at a local branch convenient to you. When the required paperwork and checks have been completed, your new account should be activated within 48 hours.
You will be asked to provide your certificate of incorporation, the memorandum and articles of association, and copies all share certificates. Company directors and any shareholder who owns 25% or more of the business will be asked to provide photographic ID and proof-of-address documentation. Alternately, customers also have the option of opening business accounts with Cashplus or Barclays. If you’d like to know more, get in contact and we’d be happy to help