How to open a business bank account for your photography LLC

How to open a business bank account for your photography LLC

Now that you’ve taken the plunge and created your photography LLC, you’ll need a place to keep all those dollar bills that will be rolling in!  It’s important that you open a bank account for your LLC separate from your personal accounts and use the new bank account solely for the business.  Setting up a separate business bank account helps prevent the appearance of commingling of funds and adds a layer of liability protection for you as a member of the LLC – that’s the biggest advantage of forming an LLC!

The importance of keeping your business funds separate from your personal finances can’t be overstated, and setting up a business bank account early in the life of your company can help make accounting and managing cash flow much easier – not to mention fewer headaches at tax time.

 

Some Considerations When Selecting a Bank

Most banks offer small business accounts. You’ll want to evaluate the options and determine which bank and type of account is the best fit for you and your business. What works for others, may not automatically work for you, your business, and your personal preferences.

Generally, you’ll want to evaluate the following:

Location

Think about branch locations in relation to your home, office, and other errands.  Are there multiple branch locations? Will you need to access your bank while traveling out of town?

Does your personal bank offer business accounts that may be a fit?  If so, it might save you from making stops at multiple banks for deposits.

 

National vs. Local

Weigh the big chains against the small-town branches.  Is it important to you that it’s a national bank or do you prefer to support a bank within your local community?  Do you need to connect your bank account with your accounting system?  If so, is it compatible and easy to do?  Often, the large national banks have more invested in technology and system compatibility, but the small local banks may be more accessible and offer the ability to develop a more personal relationship with your business banker.

 

Monthly Fees and Required Minimum Balances

A lot of banks charge monthly fees and require you to maintain a minimum monthly balance. But many other banks don’t charge monthly fees, so call around to a few and check before making the trip into a local branch.

 

Promotions

Be careful of promotions or incentives for opening an account. Although they may sound good, most are just temporary and usually lead to ongoing monthly fees or minimum balance requirements.

 

Different Packages

Banks often have different packages/tiers of business accounts (like silver, gold, and platinum, for example). Usually, the fancier sounding packages have extras you don’t need and higher fees as a result. Unless there is a particular reason for selecting an upgraded package, go with the basic package and save yourself the money – you can usually upgrade later if you change your mind.

 

Questions to Ask

Call your top bank choices and ask to speak with the person who handles business accounts to confirm the following:

  • Are there minimum monthly balance requirements?
  • What are the monthly fees, if any?
  • How much is needed for the initial deposit?
  • Do all LLC members need to be present?
  • What’s the best time of day for quickest service? Can you make an appointment?
  • What are the required documents?
  • Anything else I need to bring?
  • Anything else I need to know?

 

Gather Your Documents

Once you have selected a bank, you will need to gather documents to take with you to the branch to open your account.  Required documents may vary based on state and your selected bank so it’s always a good idea to call ahead for specific requirements.

The common theme is that you need the basic documents that substantiate the name and general nature of your business, the fact that your business is registered with the IRS, and that you, personally, have the authority to set up the bank account.

The following is an overview of the most common requirements:

LLC Approval

This will be your LLC’s approved Articles of Organization, which might be called something different in your state (e.g. Certificate of Formation or Certificate of Organization). If the articles of organization do not provide sufficient information regarding who is authorized to sign on behalf of the LLC, you may also need an additional LLC document that does provide that information such as a resolution.

 

Federal Tax ID Number (aka EIN)

Make sure you’ve received your EIN from the IRS before heading to the bank. You’ll need to show them a copy of your EIN in order to open your account.  For more information on registering for an EIN, click here.

 

Business License

Depending on your location, you may also need to have a business license (or permit) that states that you’re allowed to do business in the state or city where you’re located. However, this can vary from state to state.

 

Two Forms of Personal identification

The bank will require proof of your identity to open a business account. The Patriot Act, Dodd Frank Act, and Consumer Financial Protection Bureau require business owner/operators to provide certain details and data to corroborate their identities and their business models.

You’ll need to bring in two forms of ID for yourself and any other authorized signers on the account. One of these needs to be government-issued (such as a driver’s license). The 2nd ID could be any of the following: credit/debit card, passport, voter’s registration, or utility bill.

 

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Tips when Ordering Checks

After your account is opened, you’ll be able to order business checks. Below are some helpful tips.

  • Think about your starting check number: The lower the check number the more “amateur” the perception others may have of your business. You can ask the bank to start your checks at #1000 or #5000 or whatever you please to provide the perception your business has been established for a greater period of time.
  • Don’t get super-sized checks if you don’t need them: Often banks will try to sell you “special” business checks. They are big business checks that come in a large, bulky binder. Usually they are printed three to a page. Unless you have a particular need for checks in this format, you can save yourself some money by just ordering regular size checks.
  • Address on check: By default, the bank will put your address in the upper-left corner of all your checks. If you prefer not to have your address listed, just tell the bank. For that matter, you can personalize most of the information printed.  Just be sure to carefully review any changes for errors before they get sent to print – and again once you receive the checks.

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