Do you own a business in the U.K.? yes, Oh is it? Do you have a small or medium sized business? Do you have a bank account in the UK? Do you know what are the formalities to be done in order to have a business account? Do you have an idea of opening a business account?  

If you are one among them, who are willing to launch the enterprise and join the community of self-employed businessmen. Then this article is for you. First things first, to climb the ladder and reach those self-employed people you’ll need to know the following:

• Check all the legal procedures
• Chalk out the business plan
• Design the structure of your business. Whether it is a sole proprietor, partnership firm or limited company
• Pick a suitable name, address and location for your business
• If it is a limited company in the UK, appoint a company secretary and directors. Plan accordingly about your shareholders and shares. sign Articles of Association(AOA) and memorandum
• Most importantly register for corporation tax and open a separate bank account

Types of businesses in the UK

They are various business types to start with. You’ll need to opt for the best one, which is appropriate:  

• Sole trader
• Partnership firms either it may be general, Limited, Limited liability,  Private and Public limited
• Unlimited
• Social enterprise
• Unregistered and unincorporated, non-profit organizations

Whatever form it may be, there will be money transactions in the businesses daily. To continue these transactions, it is better to have a bank account within the country.

Documents required for opening a business account

There are few eligibility criteria for opening a bank account in the U.K. If you hit these, then it is easy and a simple process to open a business bank account. Usually, they only ask for your ID and address. The documents required for this are

• Proof of ID including all the company directors. Photo driving licence, national ID card, passport
• Proof of address, that includes either current bank statements, utility bill or council tax statement. If applying as a non-resident of UK then notarized translations should be provided

Company details such as your

• Business address
• Contact details
• If it is a partnership or limited companies then the registration number of your company
• Estimated yearly turnover
• In some cases, you need to prove your own personal financial position with the supporting documents. This shows the credibility and banking history of your business

Benefits of having a business account for the sole trader

Having a business account is essentially a good idea. Even freelancers and sole traders go for opening an account. As a sole trader is always a better option to have a business account.

• It differentiates from the personal account and the business account. If there are numerous business-related transaction, then there is every possibility of closing the accounts.  
• To know HMRC about your actual business costs, always prefer to have a separate business bank accounts.
• For showing a professional look, go for two separate accounts.

Whatever type of business it is having a business account and personal account is best. As it has its own pros.  

Steps to open a business account

Though the steps involved in opening a bank account can vary from bank to bank, it is always advisable to research the options online.
Though you cannot open the bank account on all the major banks, an initial application can be filled on the selected bank’s website.
Most banks prefer to meet the person before approving the account. You will be required to present all the documents listed above.
Banks will also be meeting one of your company’s representative’s in the UK. They are required to sign a mandatory document to open a business account.  
You should inform the bank whether your business has foreign shareholders or directors. Tell the bank you need a UK business account rather than the international account that operates offshore.
When all is done well, and all goes smoothly, you can easily manage the day-to-day operations in your local bank branch.

Tips for opening a business account in the U.K

Before venturing into the world of the business account, you need to look for appropriate banking  facilities such as

• Bank fees and account charges
• Any recommendations from other companies or the accountants
• Availability of online banking
• Interest rates and incentive offers

The above are the common things to keep an eye on, they are other few things also which come handy while opening a bank account.

Never fill the incorrect information

Most small enterprises, entrepreneurs and businesses tend to make the mistake of filling in the wrong information. They are even chances of bringing the wrong documents during the paperwork appointment. Since banks vary in their requirements, ensure to collect all the required information and the documents required to carry for your first meeting with the banker.

Shop around

For limited accounts opening bank accounts is a necessity. Entrepreneurs are thus, requested to shop around for the correct bank options. They are various websites to gather information and compare the prices. This is just like opening an insurance account, where you compare a whole lot of things while buying one.

Two is a better option than one

According to the studies, Businesses has to be more concerned about the banks just the same as they are with suppliers. Banks are the suppliers for your company and not your partners. Once you understand this gist, it is always better to opt for more than one bank and create a tough game of competition between them. It is just like a game of throne. If you are the person who is looking for ways to mitigate business risks, then go for two banks. To offer an improved business service, make suppliers compete with each other. This is the same case with the banks.

In a nutshell,

The formalities for opening a business bank account is not equal in all the banks. It is well worth sparing some time researching about the best banks. Switching the banks on the later stages is a tedious process and a painful task.
In the United Kingdom, all banks offer businesses accounts and have branches around and online accounts. Many try to attract potential customers by offering various perks. So feel free to inquire about the offers they provide. In fact, these perks will not matter except the fess they charge. So be careful while opening a bank account and have smooth business transactions.
A protip for your business is to never neglect the customer feedback. Make sure you research what small businesses are reviewing about the banks. If the bank is getting its fair share of issues and complaints, it is better and wise to shun or avoid it.