By Matt Eskridge
In the previous newsletter, I discussed how to register your business as an LLC or corporation, and which legal entity to choose from. Today, I will describe the process of creating a business banking account for your business, and why it is important.
A bank account is an integral part of any business. It is where you keep your money, where your income goes, and where expenses are deducted. It is very important to note that when you have a business bank account, all expenses taken from that account must be for the business. If you do not do this, then your business can be dissolved by a judge, and you can be held liable for its debts.
Opening a business bank account is just as simple as opening a personal bank account. The steps are as follows. For this tutorial, I am using the local Redstone Federal Credit Union, because they are a good institution, and they are the institution I have experience with.
Register your business as an LLC or corporation. Refer to our tutorial on this for instructions.
Wait for a few months. You will need to get the articles of organization back from the state. It is crucial that this form have a stamp with a bar code on it from the judge probate. Otherwise, you will not be accepted.
Go to the bank. If you are below the age of majority in Alabama, which is 19, you will need a parent or guardian. Sign your name and wait to see a bank employee. Provide them with the paperwork to open an Endeavor Business Banking Account. The employee will walk you through the steps from this point, but they are very simple. Note that you will need to deposit a minimum balance in the account.
Wait for a couple weeks to receive a debit card in the mail from the bank. Once you have received it, you can use it like any other debit card. Just make sure to activate it, as the instructions say on the card.
Once your account is set up, follow the instructions they provide for setting up online banking. However, at many institutions, you will need to visit a branch to move money from your personal to your business account.
You now have a bank account. You will, most likely, need a merchant account now so that you can receive payments from your customers online. Redstone, to my knowledge, does not provide this service. Next month we will cover this topic, using Paypal, Quickbooks, and Square as examples.