Contractors are required to open a business bank account has set up a limited company. They should leverage the best deal from the bank they have chosen to open a bank account with to benefit from the right services that suit the contractor’s specific needs.
When opening a bank account, a stringent application process is followed by most high street banks. This is due to the anti-money laundering and credit checks that banks are legally required to carry out. However, some newer banks will allow you to complete the process online. This will reduce the time in opening a bank account especially if you have to do so on short notice.
Whether you have to present these documents in person, by post or online, please ensure that you have carefully checked what documents are required. This will make the application process easier and prevent any delays in opening a business account.
Documents and information required for the application of a business bank account
Each bank will require certain documents and other important information, but essentially the following are always needed in the application process.
- Certificate of incorporation from Companies House showing the business name and date the company started
- Passport or Driving License showing full name and birthdate
- Proof of home address/residence
- Personal bank account details
- Nature of contractor business
- Business turnover for first 1-2 years
- Country of birth, nationality and residency status
- Time at current address and any previous addresses for last 3 years
Presenting the correct documents and information required by the bank can speed the application process up considerably.
Anti-money laundering regulations and credit check referencing
This is the most complicated part of the application process and the main reason so much personal and business information is needed. Due to the anti-money laundering regulations in the UK which require banks to verify all new customer’s identity and address before a bank account can be opened. Credit checks also require this information and although it is a relatively simple process, it does mean that contractors will have to wait for their application to be approved first which could delay contractors starting their business.
However, once the application has been approved then a bank account is opened in the company’s name. All bank details and documents are sent to the company’s registered address or the home address of the director.
Opening a business bank account with poor credit history
Most banks will refuse contractors who have a poor credit history. They would not be able to approve a bank account for such contractors due to the credit check referencing required by law. There are some banks that do accept applications from such customers. They do not run any credit checks as they would normally open only a current business account without all the extra overdrafts and credit options.