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 Zempler 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.
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.
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 for 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 to provide a UK business banking referral for non-UK residents. If you choose to apply for a Wise account, you will receive a UK business bank account number and sort code, as well as accounts in over 10 local currencies, if your application is successful.
A Wise business account will enable you to receive money for free and spend money in over 40 currencies. We have included a Wise business account referral 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 £99.99 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
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.
Zempler
Zempler offers an online business bank account with no credit checks. As soon as Zempler 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
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.
ANNA
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.
Dear Rachel,
I am a UK national with residence in the EU.
I expect to be awarded a 2-year professional contract in a non-EU country fairly shortly.
To avoid brutal taxation in my country of residence I am considering opening up an OPC in the UK and pay taxes accordingly.
My questions:
1. Is it likely I may open up a UK bank account without referring to my other bank accounts in the EU ?
2. I am confused regarding the tax rate information I’m getting over the web: is it 19 % on 20 % on income ?
Many thanks for taking my request into consideration.
Best wishes,
John
Thank you for your kind enquiry, John.
With regards to your first question, most UK bank accounts will not ask for details of other bank acocunts you may hold; however, they will ask for residents information as part of their anti-money laundering and know your customer checks.
Regarding your second question, tax is paid on Corporation Tax (on relevant profits of the company) of 19% in the UK at present.
We trust this information is of use to you.
Kind regards,
The Rapid Formations Team
Hello, I reside in Iraq and registered my company in the UK, but I could not find a bank that I could open a personal and business account with. transferwise does not support Iraq, are there other banks for non-residents?
Hi Rana
Thank you for your kind inquiry.
I believe Payoneer is committed to providing business banking services to customers in Iraq. I would suggest paying their website a visit.
Kind regards,
The Rapid Formations Team
Hi,
I am looking into setting up a limited company. Essentially I will be contracted to process data, therefore I will be the sole worker and there will be few overheads or expenses, etc. With this in mind, is it better that I conduct my finances through my current bank account, rather than opening a new business account?
Thanks in advance.
Kind Regards
Jason
Hi Jason,
Thank you for your message.
There is no requirement to open a business bank account for a limited company however opening a business bank account is usually a sensible step as it keeps your business and personal expenses separate. When it comes to filing accounts and tax returns for your company, having the business bank account means will make the process of completing these statutory requirements simpler.
Best regards,
Rapid Formations Team
Dear Colleagues ,
I’m representing LLP company , registered in UK.
Our question as follows : For this cumpony we had an account at Latvia bank and Benificiars for this company on Seychelles . Now we need to rebuild this cumpony and oppen bank account in UK , hire an office with workable email and phones . , Beneficiars will be in Ukraine . ALso we need to register 2 employees in this company , one of them is UK resident and second one in Ukrainian nationality . The main kind of compnay activity is wood production trading (Outside of UK, between Ukraine and Italy for example). Please advice how is better to register employees to company , which TAX and duties we should pay for the whole business and emploeeys and how annual or quarterly accounting report should be done ?
Awaiting yours
Krgds Slava
Hi Slava,
Thank you for your message.
Unfortunately, we are not able to advise on accountancy and taxation matters are we are not accountants. I would suggest you seek professional advice regarding the requirements for the LLP.
Best regards,
Rapid Formations Team
Hi just set up limited business do I need limited account or business account orI can use 1 of my personal bank accounts
Thank you
Dear Daniel,
Thank you for your message.
There is no requirement to open a business bank account for a limited company however opening a business bank account is usually a sensible step as it keeps your business and personal expenses separate. When it comes to filing accounts and tax returns for your company, having the business bank account means will make the process of completing these statutory requirements simpler.
Best regards,
Rapid Formations Team
Hi, I am a director of 2 small limited companies. Is there a legal requirement to have 2 separate business accounts? I understand it would make the book keeping slightly more complex but the cost of 2 business accounts would be difficult to manage.
Thank you in advance
Dear Jules
There is no requirement to have any bank accounts in a business name so you can set up the financial control element of your business any way you want.
Best Regards,
At present my Ltd company which has two directors has a business account which was free to use for the fist 18 months it is now ending that period and I was wondering if it would be beneficial to transfer funds to a business savings account. I’m not sure of the difference or if it’s legal. Could you please advise. Thanks
Dear Maggs
There is no restriction on the type of account a company can hold its money in so you are free to act in the best interests of the company to use any bank account you wish.
Best Regards,
Hello,
I am one of 4 partners for a recently set up record label. Do all 4 of us need to be signatories for the bank? The reason I have asked is because only 2 of us are dealing with the financial side of things.
cheers
Dear Allyx,
The obligation for bank signatories will be dictated by your bank so if they do not require everyone as a signatory then there it is unlikely there is anything in the company Articles of Association which would require this.
Kind Regards
Hi there,
I am the only director of a very low maintenance limited company, with just a few transactions a year. I do not want to pay the fees for business banking as this would wipe out a large proportion of profits, nor do I want any of the business advice that the banks offer alongside their business accounts. Am I able to run the limited company through a personal account, if I open a new personal account that is completely separate from my day to day finances so that the two shall never be mixed up?
Thanks
Features
Dear Features,
Thank you for your message.
There is no stipulation that you have to open a business bank account however I would suggest you may need to get permission from your bank to allow the personal account to be used for business purposes.
Best regards,
Rapid Formations Team
Hello,
I am in the final stages of setting up a ltd company in the UK with two directors, myself a UK resident and my business partner a US citizen. Our business is conducted 100% on Amazon and the bank account we need is to send payment to manufacturers and receive payments from Amazon.
I have had no success so far in setting up a business account with UK based banks. Two things, could I not just set up a normal current account for this? And could you point me in the right direction of any banks you know may accept our application? Both our credit files are clean.
Thank you very much.
Phil
Dear Philip,
Thank you for your message. We cannot provide any direct links to banks who are guaranteed to accept an application from anyone. We would suggest you read our blog on the topic to give you some more guidance – https://www.rapidformations.co.uk/blog/business-bank-accounts-for-non-uk-residents/
Best regards,
Rapid Formations Team
Hello, yesterday I tried unsuccessfully to open a business account for my limited company. At my appointment with HSBC I was told I had failed a credit check due to personal factors on my report. I have checked my report via Experian & all the negative factors seem pretty minor. Is there anything that the banks you deal with can do to help me?
Mobile : 07903 061982
Hi Kenzer,
I’m really sorry to hear this, what a nuisance for you. Unfortunately we have no control over the decisions made by the banks we deal with, so we cannot guarantee that you would have any success with them either.
The best thing to do is to apply to your own bank – the one you hold a current account with. This tends to be a good choice, especially in cases where credit checks results have been an issue. Failing that, I would recommend trying one of the banks below:
MyCashPlus http://www.mycashplus.co.uk/business/how-it-works/default.aspx
CardOne https://www.cardonebanking.com/business/applicationForm.aspx?sc=A00003000009000011
Metro Bank https://www.metrobankonline.co.uk/Commercial/Bank-Accounts/Business-Bank-Account/
Best of luck and kind regards,
Rachel Craig