How to Open an Online Business Checking Account

Bank5 Connect Business Checking

You might be a business owner who has gotten by combining or co-mingling your business and personal checking accounts. Now there may be changes in your business and/or in the marketplace. Those shifts have driven you to explore how to open an online business checking account. You might already know that your best bets in having no or low monthly fees is to set up the account online instead of as a traditional account in brick and mortar. NerdWallet provides a state-by-state list of what financial institutions provide free business checking.  Also, you should know that a growing number of brick and mortar banks and credit unions do provide online or Internet checking accounts.

There are many benefits to segregating your commercial transactions in a separate business checking account. Those include easier tracking for tax purposes, ability to allow others in your organization to conduct financial business, capability to accept credit and debit cards and deepening the relationship with a bank or credit union. The latter can pay off when borrowing or re-negotiating a loan. In addition, issuing checks from a business account transmits a more professional image. Increasingly important in marketing and sales is the brand identity or reputation management.

Because this is a commercial account it is subject to more regulations than a personal account. The U.S. Small Business Administration provides a guide to those.

For example, if your business is a service one involved with money transactions you cannot open an account through the Internet. You have to come to the financial institution in person. Those services include wiring funds, check cashing, issuing store value cards, exchanging currency and providing money orders. In addition, that same regulation applies if your industry is involved with telemarketing, government entities, precious metals and gambling.

You might have structured your enterprise as a sole proprietorship, general partnership, limited partnership, limited liability partnership, limited liability company, corporation, publicly traded corporation, professional corporation or unincorporated association. For each one, you have to provide certain documents to open a business checking account. The details are presented by the U.S. Small Business Administration. If you are in the process of deciding what structure is the best fit for your business now, you can obtain free recommendations from SCORE. That organization consists of retired executives who provide guidance to businesses.

Let’s look at the documentation mandated for a few structures.

Limited Liability Company

  • Tax Identification Number
  • Articles of Organization or Certificate of Formation
  • If others in addition to the owner are authorized to sign checks and other transactional documents then their names should appear in the Articles of Organization. If they don’t, then the Corporate Resolution is another required document.

Sole Proprietorship

  • Depending on the financial institution, Social Security number or Business Tax Identification Number
  • Business name filing document which shows both the name of the owner and the name of the business
  • Business license which contains both the owner’s and the business’ name

Publicly Traded Corporation

  • Business Tax Identification Number
  • Either Articles or Certificate of Incorporation
  • If names of other authorized signers are not listed in Articles or Certificate of Formation, then the Corporation Resolution must be presented which does contain this list.

To shop around for the best deal for your business, you can key in on a search engine such as Google or Yahoo the phrase “online business checking account.” Another approach is to speak with your current financial institution about what terms and conditions they can provide you. A third way is to tap into your professional network for information about what banks and credit unions have been both most cost efficient and helpful. There are also online reviews and comments to articles on the subject which could be enlightening.

The investment of your time in exploring online business checking accounts could yield a significant return in transactional convenience for both business and clients/customers. In addition, the brand could be enhanced.

One thought on “How to Open an Online Business Checking Account

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