Everything you need to know about a business account for a limited company

Never mix business with pleasure.

Another cliche that turns out to be true, particularly for limited companies.

Limited companies are separate legal entities — in other words, they are persons in their own right.

This means that the owners of limited companies are legally bound to have a separate bank account dedicated to their business.

But what is the best business account for a limited company? And what should businesspeople look for when choosing a business account?

This article at a glance

Traditional high street banks usually offer free banking services for a limited time, only to charge monthly account fees after that time is up. On the other hand, newer digital payment providers provide seamless payment solutions and better rates. This article covers how to choose a business account for a limited company, a list of the best business accounts, and the documentation required to open one.

Do I need a business bank account for my limited company?

Yes, you do! Opening a business bank account for your limited company is a must for managing finances. Depending on the bank you choose, you will need to provide some documentation to verify your company. Make sure to check what documents you’ll need and the bank’s requirements before you start the process.

Does a limited company need a business bank account?

Having a business account that’s separate from one’s personal finances doesn’t just show sound business acumen and enhance a business’s legitimacy — it’s a legal necessity.

A limited company is a separate entity with unique legal obligations and finances — in short, limited companies must have a separate business account.

But having a limited company without a business bank account can get you into murky legal waters. Companies House requires businesses to have a business account that is separated from their personal bank account.

In short, limited companies must have a business bank account solely for business purposes.

Benefits

1. Easier access to business loans: Having a separate bank account for your limited company helps lenders see that it is a legitimate and separate business entity. This can make it easier to qualify for traditional business loans or other types of financing.
2. Establishing credit: A bank account in the name of your limited company gives the business its own credit history, making it easier to make larger purchases or borrow money at better rates in the future if needed.
3. Increased control over finances: With a separate account, you can more easily track cash flow and manage expenses related to the company.
4. Tax benefits: Having a separate bank account for your limited company helps keep personal and business expenses separate — which makes it much easier come tax time when you need to deduct related costs from income taxes or report them on financial statements.

How do I choose a business account for a limited company?

Selecting a business account for a limited company can be time-consuming and overwhelming. How do you know which bank account is suitable for your limited company?

Ultimately, it boils down to your business needs — size, goals and long-term plans. But there are other features that you should be aware of.

Mobile and online banking

Online banking is the bedrock of the 21st-century economy — customers and businesses are often on-the-go and need fast transactions.

Mobile and online banking apps enable fast access to your business account wherever you are. Be sure to check if your preferred bank offers mobile and online banking features for your business.

Customer support

Good customer support comes in handy when you face specific transaction issues — if your bank blocks your transaction, for example. Moreover, you will need to find a banking provider that understands the needs of a business involved in international trade.

Monthly fees

Finding a business account for your limited company shouldn’t break the bank. Ensure you find a business account that offers competitive monthly fees and plenty of added perks — for example, 12 months of free banking, and a free subscription to accounting software.

The six best business accounts for limited companies in the UK

Bank

What You Need to Know

RBS

— 12 months of free banking - No minimum monthly fee (pay only what you need) - £0.35 per item for online or digital payment in and out of your account - £0.70 per £100 for cash payment - £0.70 per item for Manual fee for cash payment or cheque handling - Manage your account using the mobile app - Free subscription of FreeAgent accounting software - They have business bank accounts for businesses of all shapes and sizes. Read more about their business bank accounts.

HSBC UK

— 12 months of free banking - £8 per month after the end of 12 months - 1.5% additional charge for cash paid or via branch counter - Payment fees for international payment from £17 onwards - Integration with QuickBooks, Xero & Sage - 24/7 online and mobile account management HSBC UK is one of the popular choices in traditional banking. It offers different types of accounts available for various

Barclays

— 12 months of free banking - £8.00 monthly fee + £0.35 transaction fee (mixed payment plan) - £8.50 monthly fee (e-payment plans) - Online and mobile account management Barclays designs two price plans for businesses in the way they pay and receive payments. You can find out which plans suit your business better.

Co-operative Bank

— No service charge for first 30 months - £10 per month after 30 months - Free faster payment - Free automated debits and withdrawals - Online and mobile banking services Co-operative bank provides straightforward bank charges and basic banking functions, such as managing your business finances, online transfers and card payments. If you make frequent international bank transfers, you may want to check with them about potential charges.

Cashplus Bank

— No monthly fee - Maximum £50K - 24/7 online banking and mobile banking app Cashplus is suitable for private limited companies, sole traders and growing businesses. You can apply for their business bank account within minutes upon approval.

Silverbird

— No monthly fee - No onboarding fee - No deposit requirements - 0.10% transfer fee with a minimum of 14.95 Euro fee - 0.15% transfer fee with a minimum of 19.55 Euro fee Silverbird has a simple pricing structure. As Electronic Money Institution (EMI), setting up a business account is easy. You can provide your local bank details and send and receive payments quickly from your clients internationally. You can read more about their business account plan.

How do I open a limited company bank account?

Depending on the bank you choose, you will be required to produce some documentation to verify your limited company.

What documents do you need to open a limited company bank account?

You will need to prepare the following:

• Proof of identity — it can be a passport or UK driving license
• Proof of address — you are required to produce any form of proof, such as a bank statement or utility bill from the last 3 months
• Proof of residency — you will need to show your residence status
• Company’s certificate of incorporation — not all the banks require a certificate of incorporation. However, it’s essential to prepare this document. Check with the relevant banks
• Annual Turnover — some banks require you to have a minimum annual turnover before you can open a business bank account
• Company’s transactions — you may need to inform the bank of the number of transactions you go through in an average month

Is it possible to run a limited company from a personal bank account?

Never mix business with pleasure.

It’s not advisable to use your personal bank account for your limited company. Besides being a legal requirement to separate your accounts, it’s best not to mix your personal income and expenses with your business bank account.

When tax season comes calling, you’ll be kicking yourself as you try to work out whether each transaction was either business-related or for personal use.

Can a limited company have two bank accounts?

There’s no limit to how many bank accounts you can have.

It depends on your company’s requirements. For example, you may use your business bank account for your international transactions and your savings account for your daily expenses.

FAQs

How to open a limited company bank account

To open a limited company bank account, you’ll typically need your company’s incorporation documents, proof of identity and address for directors, and details about your business. It’s best to shop around for the best account options and fees, and book an appointment with your chosen bank. You can open a limited bank account on https://join.silverbird.com/prequalificationSilverbird.

Which business bank account is best for a limited company

The best business bank account for a limited company depends on your specific needs and preferences, but some popular options include HSBC, NatWest, Barclays, and Santander. Consider factors like fees, account features, and customer service when comparing options.

How to open a limited company bank account

To open a limited company bank account, follow these general steps:

1. Choose a bank that meets your needs.
2. Prepare the required documents, including your company’s incorporation documents, proof of identity and address for directors, and details about your business.
3. Book an appointment with your chosen bank.
4. Attend the appointment and provide the required documents.
5. Wait for the bank to process your application.
6. Once approved, you’ll receive the necessary account details and can start using your new business bank account.

Make payments a breeze with a Silverbird multi-currency account

There was a time when you wondered, “Do I need a business bank account for an ltd company?”

We hope that is no longer the case.

Cross-border payments comprise the backbone of the 21st-century global economy. Making and receiving payments on time can make or break a business.

But traditional banks haven’t caught up. SMEs face ludicrously high exchange rates and hefty account fees.

That’s why thousands of SMEs are flocking to Silverbird.

Make payments in over 30 currencies from a single multi-currency account tailored to your needs. Enjoy round-the-clock 100% human customer support. Rest easy with 100% of your money held in Tier-1 banks. Set up an account in minutes.