Bank Account for LLC: Everything You Need to Know
Bank Account for LLC
Opening a bank account for your LLC is a necessity. It reduces risk during an audit, provides asset protection when business and personal finances are kept separate, makes bookkeeping easier, and can help avoid partnership disputes. Even if we don't open your checking account, please ensure this is done.
After filing Articles of Organization and obtaining an EIN from the IRS, you can open an account. Most financial institutions require you to have a signed operating agreement, but not all. If you use our account opening service, we handle all this for you.
LLC Bank Account Requirements
Given how regulated the banking industry is, many institutions have similar rules and requirements to open a business account. Banks commonly require you to provide:
- Articles of Organization
- Employer Identification Number (EIN)
- Operating Agreement (often required, but not by every bank)
- Name, date of birth, and address for owners or controllers meeting ownership or control thresholds set by the bank
- Social Security Number (SSN) or other tax identification number of owners (if they have one)
- Government-issued ID such as a driver's license or passport
The above documents are commonly required to verify the business and satisfy regulatory "know your customer" obligations. Gone are the days when anonymous bank accounts were possible due to anti-money laundering laws and counter-terrorism regulations.
Many companies tempt you with an offer to purchase a "Resolution to Open a Bank Account," but this is often unnecessary for LLCs. While some banks may request internal authorization documents, many do not require a separate resolution. We include one at no cost for convenience, but it is not universally required.
Who Can Open an Account
The person opening the account must have the authority to do so. Owners and managers are typically authorized signers for the company and may complete the paperwork. Their authority is commonly demonstrated using a signed operating agreement or comparable internal documentation. In many cases, only one authorized person needs to be present, while others can provide verification remotely if required by the bank.
Single-Member LLCs
A single-member LLC should still obtain an EIN and open a bank account. While some banks allow accounts to be opened using a Social Security Number, and some owners choose to use a personal account, this is generally discouraged.
If the Internal Revenue Service audits the business, having a clear separation between personal and business finances makes supporting business expenses easier.
If you are sued, commingling personal and business funds can weaken limited liability protection. Poor recordkeeping may make it difficult to distinguish company funds from personal funds, which can increase the risk of a court disregarding the LLC's liability shield.
Having a separate account also makes bookkeeping easier and allows you to evaluate business performance independently from personal finances. With our bank opening service, we submit account applications promptly, though bank approval timelines may vary.
Sole Proprietorships
It's important to distinguish between a single-member LLC that is taxed as a sole proprietorship and a true sole proprietorship that has not formed a legal entity with the state. The former refers to a tax classification only; the LLC remains a separate legal entity. The latter refers to an individual doing business without forming an LLC or corporation.
In such cases, a separate bank account is not legally required for asset protection. However, it can still be useful for separating personal and business transactions and simplifying bookkeeping. Ultimately, whether to open a separate account is a personal decision.
Prohibited Industries
Some industries are not supported by many traditional banks and may require specialized financial institutions. This does not mean accounts are impossible, but additional diligence or alternative providers may be necessary.
Industries that often face banking restrictions include:
- Drugs, including marijuana dispensaries (even where state-legal)
- Gambling and casinos
- Adult content
- Tobacco products
- Weapons and firearms
- Cryptocurrency-related businesses
- Unregulated lending
If your company falls into one of these categories, some traditional banks may decline the application. Specialized or international financial institutions may be options depending on the circumstances.
Online Bank Applications
Most banks now offer some form of online account application, though the process and ease of use vary widely. Many online-focused banks provide streamlined onboarding, mobile apps, and features such as low or no monthly fees and reduced minimum balance requirements. Traditional brick-and-mortar banks may still require additional steps or in-person verification.
Non-US Resident Bank Accounts
Non-US residents often face additional requirements when opening US bank accounts, primarily related to identity verification and country-of-residence restrictions. US banks are subject to heightened regulatory scrutiny when onboarding international clients.
Some financial institutions are more open to working with non-US residents, and application requirements may differ by bank. In many cases, additional documentation beyond a passport may be required.
Prohibited Countries
Each bank maintains its own risk-based policies, but residents of certain countries may face significant restrictions when attempting to open US financial accounts due to sanctions and compliance rules. Commonly restricted countries may include:
- North Korea
- Iran
- Syria
- Somalia
- Belarus
- Russia
Policies vary by bank and are subject to change.
Best LLC Bank Account
We believe the best bank account is one with transparent pricing and minimal fees. Many banks generate revenue through lending and other services, and some offer accounts with no monthly maintenance fees or minimum balance requirements.
Bank Account Features & Warning Signs
With the growth of online and "neo-banks," many new options are available. Some operate using another institution's banking charter. Each bank is different, and businesses should evaluate which features best suit their needs.
FDIC
FDIC stands for Federal Deposit Insurance Corporation. It is a government-backed program funded by banks that insures deposits in the event of a bank failure, currently up to $250,000 per depositor, per insured bank.
Some institutions offer programs that spread deposits across multiple insured banks, potentially increasing total FDIC coverage.
Integrations
Many modern banks integrate directly with accounting and payment platforms such as QuickBooks, Xero, PayPal, or Stripe. Integration availability varies by bank.
Check Deposit & Cash Management
Mobile check deposit is common, but not all online-only banks support cash deposits or outgoing paper checks. Businesses that handle cash may need a bank with physical branch access or third-party cash-deposit options.
Anti-Money Laundering & Know Your Customer Laws (AML & KYC)
AML and KYC regulations require banks to verify customer identities, understand ownership structures, and assess sources of funds. These requirements apply to all business accounts and are enforced through federal regulations.
Is a Bank Account Needed?
Yes. Without a separate business bank account, many of the benefits of forming an LLC—such as cleaner accounting and maintaining separation between business and personal finances—can be undermined.
Using a personal account for business purposes can lead to commingling funds and create confusion for partners, accountants, and auditors. While opening a new account requires some effort, online banking has made the process significantly easier.
With proper documentation and the right banking partner, you can safeguard your business's financial interests effectively. If you have any questions about forming your LLC, please complete our contact form.