There are several tasks and responsibilities to take care of when starting a business. A crucial step for business growth and financial management is opening a checking account. Why do you need one?
According to a tax accountant in Santa Monica, it helps you streamline your finances, which, in turn, gives you a clear picture of your company’s financial health. Here, you will find a checklist telling you what you need to open a checking account for your business.
1.Organizational Documentation
Before you set up an appointment with your bank, make sure you have all the necessary documents at hand. These include the business license and the Employer Identification Number (EIN) if it’s a corporation or partnership. Sole proprietors can use their Social Security Number.
2.Personal ID
You need a source of personal identification. It will verify your identity to the bank. You can use your driver’s license or passport and Social Security Number or Individual Taxpayer Identification Number for sole proprietors.
3.Documents of Business Formation
Based on the structure of the business, you will need different types of documentation. A tax accountant in Santa Monica suggests carrying Articles of Incorporation for corporations, Articles of Organization for LLCs, Fictitious Business Name Statements or DBA for sole proprietors, and Partnership Agreements for partnerships.
4.Ownership Agreements
If your company has several owners or multiple stakeholders, banks may request an Operating Agreement or a Partnership Agreement. This outlines the roles and responsibilities of every party involved.
5.Personal Credit History
Companies and key stakeholders often have their personal credit histories reviewed by banks. You must know your credit standing before initiating the application process. Most banks do a soft credit check, so you don’t have to worry about it affecting your credit negatively.
6.The Initial Deposit
Most financial institutions demand an initial deposit to open an account. Remember to check this in advance, as the amount can differ significantly.
7.Business Data
Banks may request a few pieces of crucial information about your company, including the nature of the business, expected account activity, business name & address, and contact details.
Wrapping it Up
It’s vital to establish credibility and organize finances by opening a business checking account. You must keep track of all emails or paperwork that may prove useful in the future for your tax accountant in Santa Monica. They will use it when tax season comes.
This makes it easy for the business accountant to fast-track the tax paperwork, and you will eliminate your headaches. Preparing the necessary documents as quickly as possible will streamline the process, letting you focus on what you need to do – grow the business.
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