Can I Start a Business Without a Bank Account?

Learn how to start and manage your own business without having to open up a separate bank account. Find out what financing options are available and how to protect yourself from liability.

Can I Start a Business Without a Bank Account?

The Internal Revenue Service (IRS) recommends that all small business owners have separate bank accounts. While a sole proprietor, a person who owns a business and is personally responsible for their debts, is not legally required to use a business checking account, it's still a good idea from a tax point of view. Understanding how to manage a company without a bank account depends on the type of company you operate. The first step to starting a business without a bank account is to obtain an Employer Identification Number (EIN), also known as a Federal Employer Identification Number (FEIN) or Tax Identification Number (TIN).

The IRS issues and manages your EIN. If you haven't requested a tax identification number, you may still be able to open a business bank account with your personal Social Security number. However, it's important to note that without a business bank account, you won't look like a legitimate business as you won't be able to accept credit cards or pay bills with your personal checks. Business bank accounts help you professionally manage your company's finances and separate those funds from your personal finances.

You can find a variety of financing options, including Small Business Administration (SBA) loans, business finance and a business line of credit to invest in the future of your business. Additionally, most banks require a certified copy of a Doing Business As (DBA) to open a business bank account, since entrepreneurs cannot use their personal bank account with their company name. Many banks also offer business credit cards that you can use to start building a credit history for your startup. Chase offers a variety of savings accounts for businesses, including Total Savings, Premier Savings and a business Certificate of Deposit (CD).

Unlike personal bank accounts, most business bank accounts offer benefits and features that personal bank accounts don't. In theory, whenever the bank allows it, a sole owner can use their personal bank account for business transactions. However, as a small business owner, it's important to keep business and personal banking separate so that you can monitor the company's profitability and avoid mixed transactions. In a sole proprietorship, personal and business matters are treated as one when it comes to taxes.

If your company is incorporated as a public limited company or limited liability company and has adequate business insurance, your personal assets are protected from business liabilities. Business banking helps limit your personal liability by keeping business funds separate from your personal funds. When selecting a business bank account, make sure to choose one with an initial deposit amount and minimum daily balance that are manageable for your company. Understanding how to run an enterprise without a bank account depends on the type of company operating.

Margaret Zynda
Margaret Zynda

Amateur beer specialist. Incurable zombie ninja. Friendly burrito practitioner. Hardcore beeraholic. Amateur twitter fan.

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