As a business owner, your business should have a separate account from your personal account. This is because you need to separate your personal income from your business income. You really do not want to mix this two together.
Apart for the need to separate your personal income from your business income, there are also many other reasons to have a separate account for your business. Some of these reasons are as follows:
1. It makes it easy to track your business transactions.
2. It streamlines your record-keeping by making it easy to identify taxable benefits and deductions.
3. It makes it easier to manage and react to your current cash situation.
4. It gives credibility to your business when you send a business account to your customers.
5. It shows professionalism in your business.
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6. It is always required for business loans and grants by banks or the government.
This list is not exhaustive.
To open a business account for your business, there are some documents that would be required from you by the bank. It is very good to know and have all these documents ready before going to bank for this purpose. This would fast track the process and you would get your account opened very fast.
I would be stating these requirements in two categories which are corporate account would be used for company business account and business account for an entity registered as a business name.
The following are the documents required for a corporate bank account opening for Limited Company:
i. Board Resolution authorizing the opening of the account and approving the account signatories.
ii. Copy of the company certificate and other incorporation documents basically CAC 2, CAC 7, MEMART.
iii. Residential address of the directors.
Passports photograph of the signatories.
Bank Verification Number of signatories and directors.
iv. Valid identification of the directors such as international passport, driver’s license, etc.
v. Tax Identification Number for the company.
vi. Utility bill of company addresses such as the Power Holding Company of Nigeria (PHCN), water bill, Lagos Waste Management Authority (LAWMA), Office rent receipt. Any of these can suffice.
vii. Evidence of Special Control Unit Against Money Laundering (SCUML) registration for companies categorize as DNFI.
viii. Two reference forms by corporate account holders.
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For an entity registered as a business name, the following documents would be required:
1. Business name registration certificate.
2. Passport photograph of the business owner.
3. Residential address of the business owner and the business.
4. BVN of the business owner.
5. Utility bill of the business owner such as the Power Holding Company of Nigeria (PHCN), water bill, Lagos Waste Management Authority (LAWMA), Office rent receipt. Any of these can suffice.
6. Evidence of Special Control Unit Against Money Laundering (SCUML) registration for companies categorize as DNFI (if applicable)
7. Valid identification of the business owner such as international passport, driver’s license, etc.
8. Tax Identification Number for the business.
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You can open as many business accounts as possible if you have multiple businesses. It is advisable that you do that to be able to track the income and expenses from each business without lumping them up.
You still need more clarifications, drop your questions in the comment section….
DISCLAIMER: These tips does not substitute the services of a legal practitioner but for educational and enlightenment purpose.
Writer: Segun O. AKINLABI is a business consultant and a news publisher at Egalitarian Voice (www.egalitarianvoice.com). He’s the director of EGALITARIAN ENTERPRISES, Ibadan in Oyo State.
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