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?
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.
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.
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.
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.
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.
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.
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.
What You Need to Know
— 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.
— 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
— 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.
— 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.
— 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.
— 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.
Depending on the bank you choose, you will be required to produce some documentation to verify your limited company.
You will need to prepare the following:
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.
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.
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.
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.
To open a limited company bank account, follow these general steps:
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.
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