Many individuals who have gone through the process of setting up a company mistakenly believe that because they have a personal bank account, this will be sufficient for their limited company’s banking purposes. Regardless of how much your newly set up company is earning, or the number of transactions through the account per month, it is vital that your limited company has its own bank account. The major feature of a private limited company is that it has a separate legal identity from the director and owner. By sharing a bank account for business and personal purposes this boundary is blurred and confused.
In the UK it is a legal requirement for the business finances of a limited company to be kept separate from any personal finances. We recommend that all of those who register a company through Wisteria open a bank account as soon as possible, so that finances and accounts are clear from the date of incorporation. There are certain documents and pieces of information that can help speed up the process, in addition to taking advantage of our bank introduction scheme.
In order to open a business bank account when you register a company, the bank you select will require certain pieces of information and potentially certain documents. Wisteria Formations can offer an introduction to the business team at either HSBC or Barclays bank, in order to reduce the hassle for you of arranging an appointment and passing over the initial incorporation documents. After initial contact has been made, the bank is likely to ask you a number of questions before the account can be opened.
Firstly, it is likely that the bank will be interested in learning as much about your business as they can. This will help them tailor the types of accounts that you need based on the company’s requirements. The bank will probably ask for a detailed description of your business activity. This information should not only cover the markets in which you trade, but also any financial figures that you may have, such as previous or expected total revenue. Additionally, they are likely to enquire into the type of customers that you will be serving. They will be interested in whether they are individuals, business or public bodies. Also, the bank will want to know whether any customers are likely to be from abroad. This is so they can tailor the account to facilitate foreign payments.
The bank will also require similar personal information about the directors and shareholders as is supplied in the company formation process. Residential addresses and dates of birth, supported by relevant identity documents, will be required. In addition to simple identity details, they may also make enquiries into your personal finances and experience. The bank may be interested in personal income made in the last few years (primarily by accessing your credit score). Furthermore, they may want to know whether you have any relevant experience in the field that your company operates within.
Besides personal information and company contact details, there are a few incorporation documents that the bank may be interested in seeing. The incorporation certificate is proof of the company’s existence, including the registration number. It is not uncommon for the bank to see an official printed original copy of this certificate before they will open a bank account registered to the company. Furthermore, occasionally the bank will require you to provide them with share certificates. Although this information is on the company register, purchasing a printed certificate will often be asked for by the bank you wish to open an account with.
Finally, after supplying the relevant documents and information to the bank, you will be subject to a credit assessment. This is an important step in the process, and the bank will not open an account if the credit check is failed.
If you have any questions in relation to setting up a business bank account or on anything else about the company registration process, please contact our customer support team on 0844 893 0808.
Please note that Wisteria has no say as to whether your company will be granted an account. Wisteria can act to introduce you to HSBC or Barclays bank, but cannot guarantee an account will be opened. The final decision lies with the bank.
