Taking on a business partner can be a thrilling new adventure. A joint business bank account could be an option to consider if you and your partner share financial responsibility for the company.
Opening a business bank account with a partner is just as easy as opening an individual account. You need to do some research to identify the best bank for your company, then present the bank with information about yourself and your business partner, and finally, ensure that you fully comply with all of the bank’s requirements.
How to apply for a joint business bank account
Opening a business checking account in a partnership can be a bit of a hassle because different banks have different procedures. However, they all, for the most part, require the same standard pieces of data. Some examples are:
- Social Security number (or international taxpayer identification number). You’ll need to provide either your Social Security number or, if you don’t have one, your Individual Taxpayer Identification Number (ITIN), in order to open a business bank account. There are a few different reasons for this, but the biggest one is following the law on the federal level.
- Employer identification number. The EIN is the equivalent of an SSN for a company. The IRS provides the EIN at no cost to any business that applies for one.
- Ownership agreements and formation documents. Creditors will want to see a copy of your company’s bylaws to establish your legitimacy and establish your connection to the company..
- Business license (if required). If your business is required to have a license to operate in your location, banks may want to see this documentation.
- Certificate of assumed name. If your business has a trade or DBA name in addition to the one it’s legally registered under, you should also provide these records.
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Make sure you’re in good standing financially, have no felony convictions, have all the required documents on file, and can complete the application before you apply anywhere.
While many financial institutions now offer convenient online account opening tools, many still require customers to physically visit a branch to complete the application and open an account.
However, you may be able to avoid making a physical trip to the bank by banking online with one of them instead. There are a number of online banks (like U.S. Bank and Bank of America) and traditional banks (like those two) that will let you finish the verification process for your business checking account entirely over the internet. With the proliferation of online-only financial institutions, it may soon be possible to open a bank account without ever having to set foot inside a branch.
The benefits of opening a joint business bank account
If you and your business partner(s) share equally in the management and financial success of the company, then it stands to reason that you would both require access to the business bank account. When you and another person open a business bank account together, you both become co-owners. Each of you has full access to make deposits, withdrawals, and other account-related transactions. Furthermore, if you have a separate business checking account, you can better separate your business and personal expenses.
You can further streamline your business’s financial operations by opening a joint bank account. You and your business partner can save time and effort by using a single account for all of your business’s financial needs instead of maintaining separate checking and savings accounts.
If you need a business loan, opening a joint business bank account is a necessary first step. When deciding whether or not to lend to your business, lenders will look at the previous three to four months of bank statements. If you and your business partner operate out of the same bank account, it will be much simpler to track all of your company’s financial transactions in one place.
How to choose the best joint bank account for your business
In order to pick the best joint bank account for your company, you should think about both the near and distant future. Consider opening a no-fee checking account, like Axos Basic Business Checking, if you’re just getting started and don’t anticipate maintaining a sizable balance.
The Chase Business Complete CheckingSM account is a good choice for business partners who prefer to make deposits in person but also have the convenience of an online banking system.
In addition to these factors, you should think about the following when researching joint bank accounts:
- There are monthly charges that can be avoided by maintaining a certain balance.
- The bare minimum needed to open an account.
- Cash deposit and transaction limits.
- Machines used in banking digitally.
- Fees and availability of ATMs.
- Does interest accrue on the account.
Products and services related to finance that are not limited to those already mentioned.
Opening a joint bank account with a business partner is a smart move, regardless of the type of account chosen. You’ll be able to establish credibility for your company, lay the groundwork for future sound financial management, and make progress toward establishing business credit.