By virtue of creating an LLC, you have already separated yourself from the business, and the law recognizes you as an owner and not the business. You may think that this is enough but that’s hardly the case. You must go a step further and also distance yourself from the business operations from a financial perspective and start by opening a business checking account. We will cover what this means and how you can start your New Jersey LLC business bank account.
What is a Business Bank Account?
As an LLC owner, you enjoy a corporate veil, and what happens in the business does not affect you as an individual. For example, if the business runs into debt, it pays for itself but this should not affect what you own as an individual, thanks to the personal liability protection. It’s one of the main reasons people love such an entity. However, you only enjoy this privilege when the divide between you and the business working capital and savings funds is clear. It’s very easy to blur the lines when you share an account with the business regarding accounting and tax purposes. Take the example of where you mix your profits with your personal savings. The court will not be in a position to tell what belongs to you and you can end up going bankrupt when you face legal hurdles. That’s why you need a separate bank account for your New Jersey business.
Benefits of Opening a Business Bank Account
Is it important to create this divide and separate your business and personal finances? Yes! You get to:
- Ensure that an auditor can tell where your expenses and revenues are when creating your records;
- Protect yourself from paying debts and liabilities incurred by the business by having a clean financial record;
- Exhibit professionalism by ensuring that investors, partners, and other third parties can see the divide.
Choose a Bank That Fits Your Business Needs
Finding the right LLC business bank accounts for you can be a hassle. However, it should be easy if you focus on:
- What banking options are there? Can you transact online or must you go physically?
- Do you have an existing banking relationship with the bank? Having one opens up more doors for you.
- What are the costs? Are they affordable? How much will you pay per transaction?
- What are the minimum monthly balance requirements?
- How accessible are the ATMS and branches?
- How big should your initial deposit be?
These and more are some of the questions sure to get you a good deal as you start an LLC in New Jersey.
How to Open a Business Bank Account in New Jersey?
Please note that all institutions operate based on their in-house rules and regulations. However, for the most part, to open a bank account for a New Jersey LLC, you will need to provide:
- Your Certificate of Formation (A copy of the New Jersey LLC Public Records Filing). By the time you go to open an account, you should make sure that you have formal approval from the state to operate your business. Otherwise, your application will not go through.
- An EIN Confirmation Letter: You should get this EIN Number to your New Jersey LLC within a few days or weeks depending on when you make your application. Once you have it, you can use it as proof that you have registered for your taxes.
- A Photo ID: Banks like having photographic documents of the person running the account. In your case, you will have authorizers who will act on behalf of everyone else. They will need to provide evidence such as their driver’s license and/or passport.
- An Operating Agreement: You may or may not need one. Where you run the organization by yourself or have a few members, you can make do with a resolution to open an account. However, where your operations are extensive and a few people will act on behalf of the others, you might need to show your agreement on this.
To understand what is required New Jersey LLC paperwork, you should be ready before showing up at the bank, you can call ahead to avoid any surprises once you get there. If you’re lucky, you may not even have to show up, and the support team may direct you on the processes online. Again, this depends on whether you would like a personal touch and if the bank allows online applications.
Best Business Checking Accounts for New Jersey LLCs
When choosing an account, you need to consider aspects such as convenience, security, accessibility, and even bonuses. We have compiled some great options best for New Jersey LLCs for your consideration:
Capital One
Capital One is an ideal option for any business that handles high volumes of transactions at a go. It allows you to make unlimited transactions, enabling you to move huge amounts of cash at a time. If this is something your business can benefit from, it would be worth a look. Additionally, you can make cash deposits of up to $5,000 every month for free, saving you some cash on the monthly fee. It also helps that the bank integrates its systems with accounting software, making it easier for you to keep tabs on your expenditure.
Moreover, it also offers escrow, online banking, and lending services. Plus, you can get a credit card to use when making purchases for your business. Its high accessibility also helps. With more thousands of ATMs spread across the United States coupled with hundreds of physical locations, you can always find a location near you.
Please note that to maintain the account, you need to have a minimum deposit of $250 in your account. However, here’s some good news- there’s no minimum balance! If you ever need to use everything you’ve got stashed away, you are free to do so.
Chase Bank
Most entrepreneurs go for Chase Bank as it allows them to maintain low minimum balances and is the overall best business checking account for LLCs. As you start your operations, you will likely not be making much money in the beginning. It will thus be important that you have a partner that understands this and helps you grow your expenditure over time.
New account openers can get up to $300 as part of their bonus, which can go a long way in offsetting any pending expenses. Plus, you have the option to waive some of the monthly fees and reduce your operational costs. With no opening deposit required, you can start as you are now and build your expenditure over time.
Moreover, the account allows you to enjoy online and mobile banking services coupled with payroll and merchant options. Additionally, you can get loans and can even open savings accounts in addition to what you already have- not to mention a credit card. As long as you maintain at least $1,500 in your account, you should be good to go. You’ll be happy to know that they have almost 5,000 locations in the country. The ATMs for this best business checking account are even more!
Bank of America
Do you deal with a lot of cash? In your case, the Bank of America would be a great option. It allows new account holders to get as much as $500 in starting bonuses for opening a new small business checking account and you can transact as many as 200 free monthly transactions! Plus, you can make cash deposits of up to $7,500 at no cost, saving you some good cash.
With its payroll and merchant services, and free online and mobile banking options, it has grown to be a viable option for businesses in the country. It also allows you to integrate it with accounting software and bookkeeping tools to better manage your expenditure as you grow. You can also get loans and a credit card to help you expand your operations for more money to start flowing into your account. Also, if you prefer having 24/7 customer support, you’ll be happy to know that you can lodge queries or complaints 24/7.
Conclusion
It’s important that every New Jersey LLC owner take some steps to protect their business and themselves. While opening an account may seem like a hassle, it will not only save you time but also money in the long run. However, the amount saved also depends on the bank account for a NJ business you choose. Do your due diligence and identify the right business account type for your business moving forward.