A UK company has a separate legal personality and the assets of the company must be kept separate from the personal assets of the directors. It is therefore essential to open a bank account in the name of the company and to ensure that the transactions of the company are done through that bank account. This is also advisable for record keeping as it is good practice to keep books and records for the company and reconcile these to the company bank statements. This will greatly facilitate the preparation of financial statements of the company and help to avoid problems with Companies House and with HM Revenue and Customs.
It is worthwhile shopping around to find the best business bank account for the company. In particular, some of the high street banks in the UK offer free banking for up to two years for a business start-up. These offers should be compared to find the best deal and it is also essential to review the fees that will be payable after the free banking period finishes.
Banks may offer further facilities with business bank accounts, such as facilities for quick international payments, use of meeting rooms, access to training materials or cheaper insurance deals. There may be access to opportunities for networking, which could be important for new companies. These facilities may however come at a price and a business start-up may prefer to go without these additional benefits and settle for cheaper or free business banking. Access to some types of business bank account may depend on the size of the business so not all accounts will be open to start-up companies.
A UK company can of course operate in other countries and maintain business bank accounts in those countries rather than in the UK. The company could therefore decide to open its business bank account in another country. This could be convenient if there are non-resident directors. Alternatively, if at least one of the directors is UK resident it is possible in some cases for non-resident directors to open a bank account for the company in the UK. In this case the details and identity documents of the UK resident director would also need to be provided to the bank.
It would be normal to include all the directors of the company as authorized signatories for the bank account as they are responsible for supervising the business finances. Personal details of the directors would therefore be given to the bank when opening the account. The bank would perform background checks on the directors including a review of their credit history.
To assist in arriving at a decision on the company bank account it can be useful to ask the company formation agent to help set up the company bank account. This is unlikely to resolve any issues arising from a poor credit history of a director but the agent can give advice on the best way forward with business banking. This can also mean that the whole package is dealt with by the agent, allowing the founders of the company to concentrate on their business operations.
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