Your company is an entirely separate individual in the eyes of the law; therefore, all business finances and assets belong to the company rather than yourself. For this reason, it makes sense to record your business income and expenditures in a separate bank account rather than a personal one. Whilst there is no legislation in the UK requiring you to operate a business bank account, there are strict standards in place for recording and reporting the financial activity of your limited company.
A separate account that is exclusively reserved for business purposes will enable you to monitor, trace and account for all income and expenditure with far greater ease and accuracy than sifting through personal bank account statements in an attempt to distinguish company transactions from personal finances. After all, that’s an unnecessary and arduous task that you would be best to avoid at all costs.
How to open a UK bank account for your limited company
Naturally, opening a business bank account in the UK is much easier for company members who permanently reside in the UK, and it’s very similar to the account-opening process one encounters when setting up a personal current account. You’ll be expected to complete an application at the bank of your choice, provide copies of your incorporation documents to prove the existence of your business, present personal ID and proof-of-address documentation and agree to a routine credit check.
As part of our company formation service, we offer a business bank account from Lloyds.
Lloyds bank account is ideal for limited companies with UK-resident and limited liability partnerships with UK-resident members. It provides a fast-track application process, specialist support and guidance and up to 18 months’ free banking. Click here to find out more.
Can I open a UK business bank account if I live abroad?
For non-UK residents, the process of opening a business bank account in the UK is not quite as easy. Most UK banks require the members of the company to be based within the UK.
Quality Company Formations have teamed up with TransferWise to get around this problem by offering non-UK residents a UK business banking solution. TransferWise will provide you with a UK business bank sort code and account number, as well as banking details in Australia, the Eurozone and the United States simultaneously. A TransferWise business account will allow you to receive money for free and hold over 40 currencies and convert your money at the mid-market exchange rate. This account also provides you with a business debit card. Our Non-Residents Package, which is specifically designed for non-UK residents, includes a free TransferWise business bank account.
If you’re an overseas director, you could open a bank account in your country of residence. This may be easier and more convenient, particularly if you live in any country that is party to the 1961 Hague Convention. That being said, you will have to legalise your company formation documents through the UK’s Foreign and Commonwealth Office to confirm their authenticity for overseas banks and authorities. This is known as ‘apostilling’. You must obtain an Apostille Certificate for both your certificate of incorporation and the memorandum and articles of association. Your chosen bank will usually want to see these documents to verify your company’s existence.