A business bank account allows one to easily keep track of expenses, manage employees’ salary, convey finances to investors, receive payments, and plan the company’s budget.
A business owner must keep the funds intended for the business separate from their personal finances. A corporate account is a bank account one can open in the name of a business. It is used to facilitate transactions, receive income, and store funds. very small business that is required to pay tax should have a corporate bank account for business banking and its numerous benefits. Read on to learn the vital details associated with a corporate bank account.
Benefits of Corporate Account
Now, let us explore the benefits of having a corporate account:
1. Improves Credibility
Having separate bank accounts for personal and business purposes is immensely helpful because it makes the business appear more professional. When customers see that a business has a corporate account, they feel reassured about its legitimacy. Moreover, having this account also helps business owners receive better deals from vendors and suppliers.
2. Higher Investment Opportunities
A corporate account enables businesses to park and grow excess funds through reinvesting. Companies can also use this bank account to manage an investment portfolio and sell and purchase bonds, stocks, new companies, and other assets.
3. Offers Liability Protection
There are multiple ways to store a business’s funds. However, while users might receive more or less the same features, they will not receive the liability protection offered by a corporate account. Another essential benefit of a corporate account is that it separates a company’s assets and funds from the business owners. As a result, instead of a single person, the company as a whole is responsible for the funds.
4. Creates better Financial Management
Other crucial benefits associated with a corporate account include management of budgeting and spending. In addition, it provides more clarity with regard to the financial position of a business as proprietors get to view detailed reports and bank statements about their company.
5. Easier Financial Transactions
Business owners can carry out essential business transactions smoothly and efficiently from anywhere as corporate accounts come with internet and mobile banking facilities. Multi-location transfer of funds along with deposit and withdrawal of money at any location are additional benefits of a corporate account.
offers the best-in-class current account through trusted bank partners that solve every banking need of a business. In addition, it comes loaded with features that help ventures focus on their growth instead of wasting precious time on financial management.
How to open a Corporate Account?
It must be noted that the eligibility criteria and documents required to open a corporate account vary from one business structure to another. Listed below are some of the key points related to opening a corporate account:
- The business for which the owner wishes to open a corporate account must have a board of directors.
- Individuals and unregistered businesses are not eligible to open corporate accounts.
- Companies must receive approval from their board of directors to open a corporate account. The standard procedure involves a meeting where a vote is taken to seal the decision. The directors also engage in a detailed discussion about the account’s primary purpose, access options, and features.
- For smaller businesses without a board of directors, the owner does not need anyone’s approval or vote to open a new corporate account.
- Generally, companies appoint a dedicated person, usually the board’s treasurer, to open and operate their corporate bank accounts.
Documents required to open a Corporate Account
Listed below are the documents required for a corporate account:
- Filled application form
- Article of Association
- Memorandum of Association
- Board Resolution
- Certificate of Incorporation
- Proof of Address