As a new contractor, you’re bound to have a few questions as you adapt to your exciting new WorkStyle.
One of the most common queries we hear is whether you need a separate business bank account for your new limited company, or if your existing personal account will do the job. Read on as we answer some of the questions you might have when it comes to bank accounts as a limited company director.
Do I need a business bank account for my limited company?
Well, the short answer is yes, you need a separate account. A limited company is classed as a separate entity, it is responsible for its own finances and transactions.
How do I open a business bank account?
In our experience, it’s pretty wise to shop around. Lots of contractors stick with whoever they use for personal banking – it might be more convenient, but not necessarily the best option for you from a business perspective.
What information will I need to open a business bank account?
Once you’ve done your research and made your decision, you’ll need to give the bank the following information:
- The names and addresses of all company directors
- Any previous names/addresses (if you’ve lived at your current address for less than three years)
- Your date of birth, nationality and residency status
- Details of your personal current account
- Your limited company details
- Certified ID
- Proof of address
- Company paperwork (certificate of incorporation, HMRC letter etc)
Just a quick note, you might not be able to open a business bank account with certain providers if you have:
- A poor credit rating
- An Individual Voluntary Arrangement (IVA)
- A County Court Judgment (CCJ) or other ruling
Do I need a business account for a dormant company?
In the majority of cases, the answer is no. That’s because there shouldn’t be any significant transactions taking place if your company is dormant.
There are some exceptions, however, as you may still need to make the following payments:
- Payments for company shares from the first shareholders
- Paying late fees to Companies House
- Paying penalties to HMRC
Anything else should go through your personal account.
Can ClearSky Contractor Accounting help?
As a busy contractor, you’re unlikely to want to take time from your WorkStyle to go hunting for the right business bank account. Thankfully, help is at hand.
We’ve partnered with Cater Allen to help take away all the hassle and set you up as quickly as possible. We’ll send you a simple application form to complete and email back along with Certified ID and proofs of address – it’s that easy!
Benefits of Cater Allen include:
- No need to provide bank statements - accountants have access via 'view only' access of internet banking
- Everything is handled remotely via telephone or post, so there's no need to come into a branch
- No account balance fee (other charges may still apply)
For more information about Cater Allen, visit our business banking services page.
This is just another example of how we’ll be with you all the way through your career, whenever you need us.