Separating business money from personal money is the first piece of bookkeeping advice we give anyone, and a business bank account is how you do it. Banks in Midland are required to verify who owns a business and who controls it before opening an account, so they ask for specific documents, and the list depends on what kind of business you have. People get sent home for missing one item more often than you would think. This is the list.
Every business, every bank
- Government photo ID for every owner and every person who will sign on the account.
- Social Security number or ITIN for each of those people.
- The business's tax ID: an EIN confirmation letter from the IRS, or for a sole proprietor without an EIN, your own Social Security number.
- A physical business address. Most banks will not open an account with only a P.O. box.
- An opening deposit, in whatever amount the bank sets.
Sole proprietors
If you operate under your own name, your ID and Social Security number are usually enough. If you operate under a trade name, bring the assumed name certificate with the county clerk's file stamp; that is what lets the bank put the business name on the account and accept checks written to it. An EIN is optional for a sole proprietor with no employees, but many banks prefer it, and it keeps your Social Security number off invoices and W-9s.
LLCs
The bank needs proof the LLC exists and proof of who is allowed to act for it. Bring the certificate of formation as filed with the Texas Secretary of State, the EIN letter, and the operating agreement. If the LLC has no written operating agreement, some banks will accept a signed statement of the members and managers; it is better to have the agreement, and it is a document we can help you put together. If the LLC uses a DBA, bring the Secretary of State assumed name filing as well.
Corporations
Same idea with different names: the certificate of formation, the EIN letter, the bylaws, and a resolution from the board authorizing the account and naming who can sign on it. Banks have their own resolution form and will usually let you complete it at the desk.
The EIN confirmation letter is the document people most often do not have. If you applied online and closed the page without saving it, the IRS will not email another copy. You can request a replacement letter by phone, which takes time, so ask before the bank appointment, not the morning of.
Once it is open
- 01Move every business transaction to it. Deposits, card payments, vendor payments and payroll all run through the business account.
- 02Pay yourself by transfer to your personal account, and record it as a draw or salary depending on your structure.
- 03Get a business debit or credit card so purchases are never on your personal card.
- 04Download statements monthly. They are the backbone of the bookkeeping and of the tax return.
Frequently asked questions
Can I open a business account with an ITIN instead of a Social Security number?
Many banks will, especially for an LLC with its own EIN. Policies vary by bank, so call ahead and ask for their exact requirements before you go.
Do I really need a separate account if I am tiny?
Yes. A mixed account is the most expensive thing to untangle at tax time, and for an LLC it undermines the liability protection you formed it for.
Which bank should I use?
One with a branch you can walk into in Midland or Odessa, no monthly fee at your balance level, and an online portal that exports statements. Beyond that, the choice is yours.
We prepare the paperwork the bank wants
EIN applications, assumed name certificates and operating agreements are part of our general services, and the bookkeeping that follows is what our accounting service is for. Call (432) 257-7547 or come by 700 C Andrews Hwy in Midland. English and Spanish.
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