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Do I need a business account for my business?

Do I need a business account for my business?

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Simple answer is yes, you do.

If you have only recently started your business, it may seem like there is no point of having a separate business bank account, especially given that most of business banks require you to pay a monthly fee to use it. Whilst the business operation is relatively small, it seems logical to keep it in the same personal bank account or open a separate personal bank account. 

Once your business starts growing, you'll quickly realise that this is not very practical even if it saves you money in the short term. 

First thing that may happen is that your bank will ask you to move your business-related transactions to a dedicated business bank account. Not all personal bank account providers allow their users to use personal account for business purposes. Even if they do, there will be a limit to the level of activity allowed to occur in the account.

Second issue arises when you try to calculate how much tax you need to pay related to your business. When processing both personal and business transactions in a single bank account, it can become challenging to trace back which transactions belong to what. 

Finally, if you have registered a limited company, then it's a requirement to open a business account for your business. This is because your limited company is a legal entity that is separate to yourself as a person and therefore you can no longer use "personal" account for business purposes. 

All in all, the only time when not opening a business bank account for your business makes sense is if you are still getting everything sorted in order to start a business, or you are just testing out if your business idea actually sells before committing to it full-time. 

We hope this information helped you to make a decision about a business account. When you are ready, GoSolo can register a new limited company and open a business bank account in one go for you. In the meantime, if you have any questions, don't hesitate to reach out!

By GoSolo Better Business Banking