There is no legal requirement to open a business bank account for a limited company. However, it is more challenging to trade and manage business finances successfully without one. Aside from boosting the credibility of your company, a business bank account will enable you to record and trace all income and expenditure with greater ease and accuracy.
If you use a personal bank account for business purposes, you will find it increasingly difficult to distinguish your company’s finances from your own. Consequently, your annual accounts and tax returns will take longer to prepare. There will also be a greater risk of making mistakes, like overlooking transactions, miscalculating turnover and profit, and using company funds for personal use.
How to open a bank account for a limited company
The process of opening a business bank account for a limited company in the UK is very similar to opening a personal current account. If the company has UK-resident directors and shareholders, it should be a straightforward process
Rapid Formations offers a range of free business bank accounts from a number of leading providers, which you can review and select during the company formation process. When you have chosen your preferred bank account and set up your new company, we will send you an email with a link to open your new business bank account.
The account opening process is pretty straightforward. There is no requirement to visit the bank in person, and the ‘onboarding’ process is conducted quickly and easily online via websites and apps. Furthermore, some banks like Cashplus do not require a credit check.
If you choose to go it alone and open a business bank 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 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 a branch.
Choosing the best bank account for a limited company
When choosing who to bank with, most people approach 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 bank account for a limited company include:
- Account charges and fees
- Recommendations from an accountant
- Independent customer reviews
- Whether the bank provides a telephone banking service
- Whether there is an online banking option
- Interest rates, if any
- Any incentives offered
Business bank account options non-UK residents
Non-UK residents can easily register a UK limited company, but setting up a UK business bank account for a limited company is more challenging. This is because many banks require account holders to live in the UK.
To address this issue, Rapid Formations has partnered with Wise (formerly TransferWise) to provide a UK business banking solution for non-UK residents. If you choose to open a Wise account, you will receive a UK business bank account number and sort code, as well as Eurozone, US, and Australian bank accounts at the same time.
A Wise business account will enable you to receive money for free and hold funds in over 40 currencies. We have included a Wise business account within our Non-Residents Packages, which is ideal for non-UK residents looking to form a company with UK business banking.
Another option for non-UK residents is to open a business bank account in their own country. If you choose this option, your bank will request apostille certificates to verify the authenticity of your UK company documents. Apostille certificates are obtained through a legalisation procedure involving the Foreign and Commonwealth Office.
At Rapid Formations, we provide an Apostiled Documents Service for a cost of just £89.99 plus VAT per document.
Our business bank account offers for UK residents
Rapid Formations offers a choice of 8 business bank accounts to UK-resident clients, which we outline below. You will have the option to select one of these bank accounts during the online company formation process.
Barclays provides 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 provides our customers with a Business Bank Account with 25 months’ free business banking. After your company has been incorporated, simply complete an online application and your bank account will be set up within 5 working days.
The online business bank account offered by Mettle (by Natwest) allows customers to add receipts to transactions and create invoices with company logos via an App. Just complete a quick online application form and your business bank account will be set up within minutes.
Cashplus offers an online business bank account with no credit checks. As soon as Cashplus verifies your details, you will receive your unique Account number and sort code, so you can start receiving payments straight away. A Mastercard Business card is available for a small fee.
Tide’s business current account integrates with Xero, QuickBooks and Sage, so you can manage all of your company’s financial administration, accounting and invoicing, via their App.
Countingup offers an online banking solution that automatically categorises your business income and expenses via an App. Complete a short online application and your business account will be opened within minutes. Your contactless bank card will be sent as soon as you activate your account.
CardOne online banking solution provides a corporate Mastercard with no credit check requirements. Your corporate Mastercard will arrive a few working days after company formation.
If you choose a business bank account from our partner ANNA, you can issue separate debit cards to your co-workers and set up spending limits. Your account can be opened in as little as 3 minutes and you will receive your business debit card within 5 working days.