Business bank account for LLC: a complete 2024 guide

The article was updated on 19.09.2024

Opening a dedicated business bank account for an LLC is crucial for managing finances effectively and maintaining a clear separation between personal and business transactions. 

An LLC bank account is not just a convenient tool but a fundamental aspect of legal and financial management. It helps uphold the LLC’s limited liability protection, simplifies tax reporting, and enhances the company’s credibility with clients, suppliers, and financial institutions.

Find out how to open a business bank account for LLC and why you need one in this article. 

Why you need a business bank account for your LLC

A business account is a type of account that a traditional bank or PSP provides for companies. Businesses use such accounts to access financial services necessary for their work.

A business bank account for LLC (also known as an LLC bank account) is a business account that offers services to limited liability companies. Essentially, most business bank accounts can be suitable for a limited liability company.

Here are the key reasons why you need a separate business bank account for your LLC:

• Funds separation. First and foremost, you need to isolate your business funds from personal finances. Not only is it a more professional approach to your job, but it also allows you to maintain the LLC’s limited liability protection.
• Better money management. When all your corporate funds are in one place and are separated from personal ones, it is much easier to track your expenses and income.
• Credit reputation. Thinking about getting small business loans or credit lines for your LLC? You will need to establish a credit history for the business, which is why an LLC bank account is necessary.
• Dealing with taxes. This one is self-explanatory: you don’t want your finances to be all mixed up when the tax season comes.
• Preparing for audits. A separate LLC bank account will be helpful, as you will have clear financial records to satisfy regulatory requirements during audits.
• Being compliant with the bank’s requirements. Lastly, some banks may fine you or terminate your account if you don’t have a separate bank account and keep your business finances in a personal bank account.

How to choose the right bank for your LLC

Before getting an LLC bank account, you first need to find a financial institution that will suit your needs. Here are some of the things you need to consider if you want to find the best business bank account for your limited liability company. 

Bank fees and charges

Look for reasonable prices and monthly fees when selecting a bank account for a business LLC. Compare the monthly maintenance fees of different financial institutions and their other monthly fees and charges. 

In the case of many business checking accounts, you will need to pay an account opening fee, a monthly maintenance fee/monthly service fee, and other fees for various services. Money transfer services, ATM fees, transaction fees, and cash deposits are also counted separately. 

There also might be a minimum opening deposit (aka minimum deposit fees). A minimum deposit for an LLC checking account is the initial amount of money that must be deposited to start the said checking account. The minimum deposit fees are necessary to activate the account, and minimum balance requirements may also be imposed.

Account features and benefits

Don’t rush into getting an LLC bank account. You first need to check the features the financial institution provides, such as cards, money transfers, merchant services, etc.

To determine which services your LLC will need, do the research. Do you need to send money internationally or make cash deposits? Maybe accept payments from clients or use sole proprietorship services? You might even need a mass transfer feature to send out thousands of payments at once.

Also, compare the different options on the market: some LLC bank accounts might provide additional bonuses and discounts, interest earnings, referral programs, etc. 

Convenience and accessibility

When you open a business account, you want to have access to your account details and finances at all times. Look for financial institutions or online banks that provide their services online, have banking apps, are accessible in your region, and send out real-time notifications to keep tabs on your operations.  

For instance, Genome offers all its services online, starting from a quick, convenient onboarding and personal/business account opening. 

In addition, find out the markets and regions covered by the bank and the currencies and countries it works with before getting an LLC bank account. You want to ensure that the financial institutions’ capabilities won’t limit you.

Customer service and support

Ensure that the financial provider offers multiple channels for customer support and can be reached when you have any questions or issues. 

It would also be beneficial if you could schedule a demo call with a financial provider so that its specialists can show you how everything works inside your LLC bank account. 

Reputation and reliability

Whether it is a traditional bank or an online-only bank, it needs to be secure and comply with all major regulations. Research if the online banks / financial institutions you consider partnering with are licensed and have a good reputation on the market. 

Also, check the provider’s website: find out if it is compliant with PCI DSS, PSD2, GDPR, and has other relevant certifications. 

Top banks for LLC business accounts in 2024

The best LLC bank accounts of 2024 possess some common features you need to pay attention to:

• 24/7 online access to the services;
• Transparent fees for account maintenance;
• Additional security features to improve the safety of data and funds;
• Money management tools;
• Money transfers;
• Bank card issuance;
• Reliable customer support.

You can find all these features and more inside Genome! Apply for an online account from the comfort of your office or home! Open a business account in EUR and start more multi-currency accounts in different currencies within seconds. 

You can have up to 5 accounts per currency (EUR, USD, and GBP) and separate your business funds for different purposes.

Make use of international money transfers and SEPA transfers (both regular and instant). Pay your employees and contractors with ease. You can also access our batch transfer feature and send out up to 3000 transfers at once.

Need a debit card for corporate purchases? Order virtual or physical Visa cards to pay in stores, online, or contactless (Apple Pay, Google Pay, Garmin Pay-compatible). Issue hundreds of virtual cards to pay for subscriptions and ads! 

Steps to open an LLC bank account

Generally, setting up an LLC bank account is no different from opening other types of business accounts. As in the case with most business accounts, the process consists of two key components: filling out information regarding you and your company and providing necessary documents.

Let us walk you through the process using the business wallet opening at Genome as an example: 

Step 1: Choosing the right bank and account type

Choose the right financial institution that will fulfill your needs for a business bank account. 

Inside Genome, after you sign up, start the wallet application process. Select the business wallet option. 

Step 2: Gathering required documentation

Find out which documents are required for a business account opening. Collect and bring them to your bank. If you apply online, you will need to scan those documents. 

To apply for a business wallet inside Genome, you will need to:

1. Fill out your personal information and clarify some business details;

2. Provide the documents. You can either upload a full company profile/ extract from the business registry or upload separate company documents/certificates with the company data;

3. Confirm the ownership structure of your business. 

Step 3: Submitting your application

Submit your application and wait for the financial institution’s response. If your application didn’t go through, find out how you can improve the situation: you might’ve forgotten to submit one of the documents or misspelled something. 

Step 4: Initial funding and account setup

Once your business bank account is up, start the setup process by contacting the financial institution’s support team.  

Inside Genome, for instance, you can request a demo call to find out more about how our business features function. 

Required documents for opening a business account

Please note that the term “limited liability company” is used in this article to refer to private limited companies around the world. At the same time, countries have their unique names for private limited companies, and how they are run and regulated may differ from country to country.

With this out of the way, let’s review what documents are usually required to start an LLC business account in Europe.

• A certificate of incorporation, a business license, or other business formation documents are required to prove that the LLC was formed and registered according to the country’s rules. 
• Memorandum and articles of association, that are necessary to confirm the structure, rules, and regulations governing the LLC.
• Documents that can prove the registered address where the LLC is located and operates. 
• Government-issued identification documents that confirm the LLC’s owners and directors.
• Tax Identification Number issued by the relevant tax authority.
• Contracts or business plans to prove that the LLC is active.  
• An LLC operating agreement might also be necessary. An LLC operating agreement outlines the ownership, management structure, and operating procedures of a business. 

Key features to look for in a business bank account

There are business banking products and banking services that are very necessary when you start a business checking account for an LLC. 

International money transfers. When you’re doing business, you will likely deal with business partners and contractors from different countries. That’s why it is crucial to have SWIFT and other international money transfer options at hand. 

Bank cards. Complete your LLC account by ordering a credit or debit card. Make corporate purchases or withdraw funds when you need to.  

Savings accounts. Check if your payment provider offers a savings account in addition to your checking LLC account, as both these business bank accounts can be quite beneficial. A savings account is ideal for an LLC as it helps grow money with a competitive interest rate. 

Payment services. You can open a business bank account for an LLC, but it may not be enough if you need to accept and process payments from clients. Thus, consider partnering with a bank that provides merchant services.  

Managing your LLC business bank account

Business banking and managing a business checking account can be challenging. Here are some tips that will help you navigate your LLC business account. 

Regular monitoring and reconciliation

To keep all your financial operations in check, you need to regularly monitor your business checking account. Not only will it help with your financial planning, but it will also allow you to detect fraudulent transactions or unauthorized charges. 

Monthly reconciliation of your business checking account with your business’s accounting records ensures they match and helps identify missing entries, errors, or discrepancies, keeping your books accurate. You might want to use accounting software or other business tools for quality tracking. 

Keeping personal and business finances separate

We can’t stress this enough: you must have separate bank accounts for personal and corporate finances. It is essential to avoid accounting confusion, complications with taxes, and legal issues when you deal with business banking, especially for LLCs and corporations where limited liability protection is important. 

Consider opening a personal account if you need a place to hold funds for your individual needs. Yes, maintaining this checking account type will likely require a monthly fee as well, but it is better to be safe than sorry.

Utilizing online banking features

When you open a business bank LLC account online, you get access to a plethora of services to help you manage it. 

For instance, many online banks offer automated alerts for low balances, large transactions, or unusual activity to catch fraud early and avoid overdrafts for your business checking account. 

The best business bank accounts also allow clients to automate bill payments and payroll or C2B transactions through online banking to send unlimited transactions, better plan financial operations, and keep customer satisfaction high.

Maximizing perks and rewards

Lastly, some business accounts come with advantages and perks, such as cashback, beneficial interest rates, travel rewards, and monthly fee waivers.

Take advantage of promotional offers like cash bonuses and interest rates on savings for new accounts. Some business checking accounts also provide discounts on various services or free trials. 

Common challenges and how to overcome them

Even the best business checking accounts can have some disadvantages. LLCs and small business owners need to be mindful of the following issues and pitfalls that might arise:

• Account mismanagement: Regularly reconcile accounts and maintain organized records to prevent errors.
• High fees: Compare bank options and negotiate fees or seek accounts with lower costs.
• Cash flow challenges: Implement cash flow management tools and maintain a buffer for fluctuations.
• Overdrafts: Set up overdraft protection and monitor accounts to avoid insufficient funds.
• Complex reporting: Use accounting software integrated with bank accounts for accurate financial reporting.
• Limited customer support: Choose a bank with responsive support and dedicated business services.
• Fraud risks: Utilize strong security measures, including multi-factor authentication and regular monitoring.

Conclusion

Having a business bank account for an LLC is beneficial for multiple reasons. It helps separate personal and business finances, simplifies tax preparation, and enhances the overall credibility of your company. 

FAQs

Why do I need a separate business bank account for my LLC?

Yes, it is better to have a separate business account for your single-member LLC/LLC company than to use a personal one. 

For one, it is better to separate your personal and business funds to better manage them and for tax purposes. Also, some banks prohibit clients from using personal accounts for corporate purposes and can even close such accounts.

Can I open a business bank account online?

Yes, you can! Nowadays, some financial providers allow it! For instance, Genome. Our Electronic Money Institution offers personal and business wallets for individuals and companies across the EU and Europe. 

The trouble-free onboarding and all services are available entirely online! If you are looking for quick and smooth money transfers, virtual/physical Visa debit cards, multi-currency accounts, and more – Genome has them all and more.

What is the difference between a personal and business bank account?

The difference between a personal and business bank account is perfectly shown in their names. You use a personal account for your personal funds and operations related to them. 

Meanwhile, companies use business bank accounts for their corporate operations. A business bank account is usually more pricey than a personal one (have a higher account opening fee, monthly maintenance fee, various transaction fees, etc.), but it also has more features that cater to corporate needs and allow for more substantial transactions. 

What should I do if my business bank account application is denied?

If your business bank account application is denied, first ask the bank for the specific reason for the denial. Address any issues, such as incomplete documentation, errors, or credit concerns, and consider reapplying or trying another bank that may have more flexible requirements for business accounts.