LLC Bank Account & Required Documents (2024)

FAQs

Can I open bank account for LLC without EIN? ›

It is technically possible to open a business bank account without an EIN, but it is not recommended. Sole proprietors and single-member LLCs can use SSNs instead of EINs to open accounts, but it can open your business up to many problems. Obtaining an EIN is free and can be done in 10 minutes on the IRS website.

How Much Should You Have In Your Business Savings Account? Aim to save at least 10% of your monthly profits, with 3-6 months' operating expenses in reserve. This is especially true if your business is seasonal and receives most of its profits over a few months.

An LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed below. Most new single-member LLCs classified as disregarded entities will need to obtain an EIN. An LLC applies for an EIN by filing Form SS-4, Application for Employer Identification Number.

As an LLC owner, neither federal law nor state LLC statutes require you to have a separate business bank account. Still, there are several reasons accountants, lawyers, and some banks recommend you do.

Applying for an Employer Identification Number (EIN) is a free service offered by the Internal Revenue Service. Beware of websites on the Internet that charge for this free service.

That's called an owner's draw. You can simply write yourself a check or transfer the money for your business profits from your LLC's business bank account to your personal bank account.

Some tax professionals recommend paying yourself 60 percent in salary and 40 percent in dividends to stay clear of IRS problems unless this means your salary would be too low compared to others in your field.

Personal and business identification

Opening a business bank account requires proof of identification for both you and your business. Examples include your state-issued driver's license or passport, your business license or your partnership agreements. Your business also may need to provide additional materials.

How long does a business bank account take to open? ›

How long does it take to apply for a Business Bank Account? If you're a sole trader or a business with a single director, applying for a Business Bank account typically takes about 30 minutes. After you've applied, such straightforward businesses can usually expect a decision within 48 hours.

If you have a limited liability company (LLC), then multiple factors will determine whether you need to get an EIN. Many single-member LLCs can simply use their owner's SSN for IRS purposes. But if your LLC will hire employees—or if it'll have multiple members—you need to apply for an EIN for the LLC.

An EIN (Employer Identification Number) is a unique nine-digit number the IRS uses to identify your business for tax reporting purposes. Unless you're a sole proprietor or single-member LLC, you'll need an EIN if you want to open a business bank account.

The IRS disregards the LLC entity as being separate and distinct from the owner. Essentially, this means that the LLC typically files the business tax information with your personal tax returns on Schedule C. The profit or loss from your businesses is included with the other income your report on Form 1040.

If you operate as a single-member LLC (where you are the sole owner with no partners or co-owners), you are not required to have an EIN unless you have employees or file excise tax returns. Still, you may need to obtain an EIN to open a business bank account in the name of your LLC.

While all Square customers have to provide a valid Social Security Number (SSN) during sign-up, we also encourage providing your EIN during sign-up. By providing an EIN, your account will be identified as a business entity and all tax reporting will be associated with your business name and EIN.

Sole proprietors can open a business bank account to keep their business and personal finance separate and have a central financial solution to manage everything related to their business finance.

You can get an EIN immediately by applying online. International applicants must call 267-941-1099 (Not a toll-free number). If you prefer, you can fax a completed Form SS-4 to the service center for your state, and they will respond with a return fax in about one week.