How to Open an LLC Bank Account

By Calandra Cooper

An advantage of forming a limited liability company is the protection the business structure provides to its members against its creditors. Members aren’t personally liable for the debt and liabilities of an LLC. However, if an LLC is sued and members can't demonstrate separateness between business and personal finances and expenses, members may become just as liable for the debts and liabilities of the business as is the LLC. Setting up an LLC bank account, separate from members' accounts, helps prevent the appearance of commingling of funds and adds a layer of protection for members of the LLC.

An advantage of forming a limited liability company is the protection the business structure provides to its members against its creditors. Members aren’t personally liable for the debt and liabilities of an LLC. However, if an LLC is sued and members can't demonstrate separateness between business and personal finances and expenses, members may become just as liable for the debts and liabilities of the business as is the LLC. Setting up an LLC bank account, separate from members' accounts, helps prevent the appearance of commingling of funds and adds a layer of protection for members of the LLC.

Setting Up an LLC Bank Account

Step 1

Decide what kind of bank account or combination of accounts is right for the LLC to conduct day-to-day business. Visit the bank’s website to see what’s available and decide what best suits the company’s banking needs in terms of fees, overdraft protection, interest, check-writing capabilities, minimum balance requirements and other factors important to the business.

Ready to start your LLC? Start an LLC Online Now

Step 2

Contact a banker by phone and ask what specific documents and verifications are required to open an account. In general, before a bank will open an account under the name of an LLC, it must verify the following to comply with its own regulating authorities: that the business is active and properly licensed as an LLC with the proper regulating authorities, the name of the business, the tax identification number (EIN) of the business and who will act as authorized signers of any account.

Step 3

Gather all documentation the banker requests of you. Although the names of the documents vary from state to state, necessary documents may include the LLC’s articles of organization, operating agreement, business license, certificate of formation, fictitious name certificate, certificate of assumed name, proof of an EIN and any other specific documents required by the bank.

Step 4

Meet with the banker to open the bank account. A hired manager or a member or members of the LLC generally act as signers of the account. If the LLC’s operating agreement doesn’t indicate who will act as an authorized signer or detail who has the right to withdraw funds, members should assign those rights prior to meeting with the banker and opening any accounts. Designated signers should take all of the required documentation along with them to to the meeting, including personal identification such as a driver's license or state identification card.

Ready to start your LLC? Start an LLC Online Now
Rules for an LLC

References

Related articles

How to Set Up an LLC in New York

Forming an LLC in New York requires business owners to submit at least two forms with the state and complete several administrative duties. Some forms are available online, while others must be written and formatted by business owners. The New York Department of State administers and regulates LLCs in accordance with the state’s limited liability laws.

Michigan LLC Laws

Limited liability companies are a popular business entity type for small businesses. An LLC provides limited liability to the business owners similarly to what a corporation provides, but can be taxed like a partnership or sole proprietorship. The Michigan Limited Liability Company Act regulates LLCs in Michigan, while the Michigan Department of Energy, Labor and Economic Growth, Bureau of Commercial Services, Corporation Division -- or DELEG -- enforces the laws.

How to Set Trust Checking Accounts

A trust needs its own checking account so the trustee can manage the trust's funds, bills and payments to beneficiaries. Because the money belongs to the trust and not the trustee, the trustee uses a separate checking account to keep trust money from mixing with his personal funds. A trust checking account also makes the trust's financial activities easier to follow and document. Only the trustee or trustees named in the trust agreement can open an account on behalf of the trust. If more than one trustee is named in the trust agreement, all trustees should go to the bank together to open the account. Each trustee has a legal obligation to ensure the other trustees act for the benefit of the trust -- and this duty includes the use of the money in a checking account. The bank needs the information for, and identification from, all trustees who will use the account.

LLCs, Corporations, Patents, Attorney Help

Related articles

Requirements to Set Up an LLC

LLCs are relatively modern business forms that are recognized in all 50 states and the District of Columbia. LLCs offer ...

Rights & Authorities of the Manager of an LLC

Inherent in the limited liability company structure is the right of owners, who are known as members, to participate in ...

Michigan LLC Statutes

The Michigan Limited Liability Company Act of 1993 provides for the organization and regulation of limited liability ...

Does an LLC Always Have Members?

A member of an LLC is someone with an ownership interest in the company, and can be an individual or another business, ...

Browse by category
Ready to Begin? GET STARTED