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If you run your own business, no matter the industry or type of your business—limited liability company, corporation, or sole proprietorship—you almost certainly need a bank account to separate your personal income from your business income. Commercial bank accounts have different features depending on the legal form of the company and other preferences.
Traditionally, the most formal requirements apply to a corporate account. Businesses exist as separate legal entities, separate from their owners, and have rights similar to individuals – they can incur liabilities, own assets, transact business, sign contracts and open bank accounts. The only difference is that a corporation is not an individual; Therefore, it must authorize one or more people to manage its bank account on its behalf.
Opening a corporate bank account
In order to distinguish a corporate bank account from other types of business accounts, it is useful to look at the requirements for opening a corporate account. The key feature of a corporate bank account is that it can only be opened by the decision of the board of directors. In contrast, a regular business bank account can be opened by an owner or another person without a vote being held, as long as that person has the authority to sign the paperwork. Typically, a corporate bank account is opened by the treasurer of the board of directors after a corporate resolution is brought forward authorising him or her to carry out this task.
Documents required for opening a corporate bank account
Opening a corporate bank account is a straightforward and relatively simple procedure; however, you need to take into account all of the bank’s stipulations and required documents, which may vary significantly from country to country. However, there is a certain set of documents that forms an integral part of the process of opening a corporate bank account and will undoubtedly be required regardless of the bank. These are the most commonly required documents:
Completed corporate bank account application form, signed by the authorised signatories in accordance with the board resolution
An extract of the board resolution approving the opening of the corporate bank account
Documents that confirm the authority to open and manage the company’s bank account — e.g. a board resolution, a power of attorney, an extract from the commercial register, etc.
An original or a certified true copy of the company’s incorporation documents, i.e. the certificate of incorporation, articles of association and by-laws
Identification documents for the company’s directors, principal shareholders and authorised signatories — this list may be extended to the beneficial owners of corporate shares
Specimen signatures of the authorised signatories
Other documents may be required depending on the country and state regulations regarding risk factors and compliance requirements. These may include a director declaration providing personal information on directors and principal shareholders (a person entitled to exercise 10% or more of the shareholders’ voting rights), a business plan or audited financial statement as a proof of business, a certified copy of an organisational chart showing each individual shareholder’s percentage of holding and details of the ultimate beneficial owners for nominee shareholders.