Your Employer Identification Number, or EIN for short, is the tax ID number given to your business by the Internal Revenue Service (IRS). When opening a business bank account, you’ll often need to provide your EIN to your prospective bank.
But one commonly asked question is: ‘can I open a business bank account with only an EIN?’
This article will clear up this question. It will also cover the main items needed for opening a business account.
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Can you open a business bank account with only EIN?
In short - no, you can’t open a business bank account with only an EIN.
Your EIN is the unique nine-digit identity code assigned to your business by the IRS. But, it’s not the only piece of information banks will ask for when you want to open a business bank account.
Banks want to verify your identity and ensure your business is legitimate. Your business’ EIN is only a part of this verification process.
What do you need to open a business bank account aside from the EIN?
When opening a business bank account, you’ll need to provide your prospective bank with personal and business ID documents.¹
Banks want to verify that your business is legitimate. On top of this, they want to ensure you have the legal rights to make financial decisions for your business, and thus to open a business bank account.
You’ll need to provide valid ID, such as your passport or state-issued driver's license, to verify your personal identity. Likewise, when verifying your business’ identity, you’ll be asked for your business license.
If you have a DBA (“doing business as”), then you’ll need to provide a certificate of that name.
LLCs need to provide articles of incorporation. Additionally, you'll be asked for your business’ operating agreement. An operating agreement summarizes the internal rules and operating procedures of your business.
LLPs need to provide evidence of a partnership agreement. This will include all the names and signatures of the other partners. Information about partner rights, profit shares and management structure may also be required.
Sole proprietors likely have to provide the Social Security Number (SSN), as well as proof of address.
In addition to these documents, your bank may require you to make an initial deposit.¹
Initial deposits and minimum balances vary from bank to bank, as well as depending on your business’ type. So it’s important to select a bank with an initial deposit and minimum balance that’s manageable to maintain.
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Why do you need an EIN to open a business bank account?
Your EIN is still a key component in the application process.
As mentioned, your EIN is your business’ unique identity code, through which the IRS can identify you for tax purposes. Specifically, you’ll use this number when filing your business’ income tax returns.
Having an EIN thus legitimizes your business’ operations and identity. This indicates to banks your suitability for opening a business bank account.
However, there are instances where you may not need an EIN in order to open a business bank account. Single-member LLCs and sole proprietorships without employees, for example, are not required by law to have an EIN.²
If in doubt, you can consult the IRS website to find out if you need an EIN.
Just remember that certain financial institutions may still require an EIN, even if you’re a sole proprietorship or single-member LLC. So it’s best to check directly with your prospective bank.
Discover the Wise Business account: Easy to set up, easy to use
Finding a business account that supports your business’ needs is key to its success. If international business is at the forefront of your operations, then a Wise Business account could be the perfect match.
Wise Business is not a bank, but a smart banking alternative. With Wise Business, you can hold different currencies all in the one place. You can also convert between currencies using the mid-market exchange rate, saving you on high conversion fees.
Paying vendors or employees abroad is made simple.
Open a Wise Business account today
Opening an account with Wise is free in the US. You can choose to pay a one-off fee for local account details too. With speedy online verification, you can save time and get going with your international business.
Sources:
Sources checked February 14, 2023.
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information. This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional. We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
