Opening a Business Bank Account

[grubber2]

Hi guys, like many of you out there, I too am entering a business of my own. I'm starting a solo proprietorship that makes games for facebook that can be played for free and have ads, which also have micro-transactions for my side earnings. Naturally I need a business bank account for this venture, but I'm not too sure about what all I'll need. Does anyone here know the process and what all is needed, and if possible could you guide me through the process? Thank you!

[Owen]

Hi guys, like many of you out there, I too am entering a business of my own. I'm starting a solo proprietorship that makes games for facebook that can be played for free and have ads, which also have micro-transactions for my side earnings. Naturally I need a business bank account for this venture, but I'm not too sure about what all I'll need. Does anyone here know the process and what all is needed, and if possible could you guide me through the process? Thank you!

Well, you could open another personal savings or checking account under your name. If you REALLY want a business account, register as an LLC, S-Corp, or C-Corp and you can open up a bank account under your company.

[vangogh]

If you're a sole proprietor then you don't need a business bank account. There's a reason why you'll want one, but you don't need one. As far as the IRS is concerned you and your business are the same thing. Whether you have a personal account or a business account it's still your personal money.

However, it really helps to keep track of the money coming in and going out of your business. Should you decide to change business entities, then you possibly would need a separate business account. As far as getting one, just go into whatever bank you choose and open a business account. You'll fill out some forms and wait while the account is set up. Different banks will have different types of business accounts and different kinds of requirements for getting one. But the first step is going into the bank and talking to someone.

I use the same bank I have a personal account with and have them linked online so I can move money between them. I make business purchases with the business credit card. I have money earned by the business coming into the business account. I move money back and forth between them. The separate accounts make it easier to do accounting for the business.

One thing you probably want to do before going to the bank is register a trade name with your state. You didn't say, but I'm guessing you're in the U.S. If you haven't yet, choose a name for your business and visit the website for the Secretary of State for the state you live in. In some states it's a different site, but the SoS site usually links to it.

There will be a section of the site for business and inside a place to search for a business name. Search for yours and assuming it hasn't been registered go ahead and register the name. The cost varies by state. Here in Colorado I think it was $8 to register and it costs $1 to renew each year. Some states it costs more, but I think it's under $100 everywhere. Don't hold me to that though. Some states might require you to do more to register a business name, but the information should be on the same site.

I don't know if the banks need that, but they are going to ask for a business name to open a business account so you might as well set that up first.

Hope that helps.

[tallen]

If you operate your business under your own name -- then you don't need to register your business name with the state.

If you operate your business under an assumed name, registered with the state, then the bank will have to treat the account you open for your business as a business account, rather than a personal account, and often banks have different terms for business accounts than they do for personal accounts,

Sometimes the terms might be more favorable for a personal account, so if you operate your business under your own name rather than an assumed name, you could just open a second personal account that you dedicate for business use.

In either case, a separate account for your business is highly recommended!

As far as what the bank will need, if you are opening a personal account, they will need your SSN and a chunk of money that is your opening balance. They likely will also want to see a government issued picture ID

If you are opening an account for a business with an assumed name other than your own, they will likely need to see paperwork showing the registration of that business name with the state, as well as your SSN (and/or EIN/TIN for the business, if you've established one for your business, which you can even if you are a sole proprietor). If your business is organized as something other than a sole proprietorship, you will almost definitely need an EIN/TIN for your business, and the bank will also likely want to see your articles of incorporation, membership agreement, or what-have-you.

Certainly you can go to any bank you want, but why not start with the bank with whom you already have a relationship with your personal account?

[turboguy]

You have had some good answers here. Most suppliers don't care where a check comes from and I used a personal checking account for a long time. When I started to add employees then I thought it was more professional to get a business checking account. You might also find that a personal checking account is free if you meet certain criteria where you are more likely to have monthly charges with a business account.

[Business Attorney]

Naturally I need a business bank account for this venture...

As several prior posts have indicated, you probably don't need a business bank account. Even the micropayments and ad revenues can go into a personal account.

Also as noted, business bank accounts generally have either higher fees or larger minimum balances to avoid the fees.

[grubber2]

I see. But I want to operate under the name of "Floating Rock Games" as the name of my development studio or whatever you'd call it, (since it would be weird to have say, "John Doe Presents (name of game)" on the title screen of my games, you know what I mean) would it still be fine to just use a personal account in that instance even though I'm going by something other than my name? Otherwise thanks for all the great answers everybody ;3