After submitting your certificate of formation to form your limited liability company (LLC) in New Jersey, you have successfully created a business entity that separates you legally from being personally liable for the company’s debts and liabilities. Since your business is now considered separate from you, you will need to keep your personal and business finances separate.
In New Jersey, you must legally keep your LLC bank account separate from your personal account. It can be easy to blur lines when you share your personal account with the business. It can negate the personal liability protection you worked for by creating an LLC. Aside from the legal requirements, there are also many other benefits to having a different account for your business. The list of these advantages is included below:
Note that we are referring specifically to checking accounts when we talk about business accounts. This is because business accounts are often used for vendor transactions and to accept payments rather than to save money for emergencies.
An obvious requirement for an LLC bank account is establishing an LLC. In New Jersey, the cost to submit the certificate of formation, a foundational document required when establishing an LLC, costs $125. The online filing form can be found here. The process of applying for an LLC varies from state to state.
The decision to form an LLC is important, and we advise speaking to a legal or financial advisor for advice on how to apply in New Jersey and whether this business structure is right for your company.
In addition to creating your LLC in New Jersey, you must apply for an employer identification number (EIN) with the IRS. The application for an EIN can be found here. It is free to apply for one.
As mentioned above, when you establish your LLC, you must submit the certificate of formation. You will need to have this document handy when applying for a bank account. This document contains your LLC name, purpose, management structure, and more.
To apply for a business account, you will also need your employer identification number, operating agreement, social security number, and photo ID of the person running the account. The bank you are applying with may also have additional requirements. It’s important to check with your bank their specific requirements to save time and prevent going back and forth as you gather all the required documentation.
There are many options for what bank to open your business account with, as most banks offer this option to consumers. It is important to determine what your financial business needs are so that you can organize and compare the different banking options available to you.
You may want to consider:
Some businesses may require you to physically visit your bank more often. For instance, businesses that collect large amounts of cash. If this is the case for you, you may want to find a bank closer to you for convenience.
This is important because banks have different fee structures. Some banks also provide their customers with fee waivers under certain circumstances, including if you have met a minimum balance requirement. You should shop around and see what fees the banks you are interested in have and what ways you may be able to avoid them to prevent unnecessary costs to your business. Fees for upholding a business bank account can include:
Banks can offer some fantastic rewards to their business customers. In particular, those with larger balances in their business accounts can find some great rewards programs offered at various banks. Some banks even offer great discounts on loans if you have an account with them.
So there is no one-size-fits-all when opening an LLC bank account.
You will need to figure out which one best fits your needs, but these are some points to keep in mind when shopping in New Jersey.
There are many banking options for New Jersey LLCs to choose from. Keep in mind your goals and see whether the following may align with them.
Many new businesses choose Chase Bank because of its low minimum balance requirements. When starting your LLC, you may not have many funds. New account openers at chase can receive up to $300 as a bonus that can help offset any expenses when starting an LLC. You can also waive certain fees and reduce costs for running your LLC. There are also online and mobile banking options available that can be very convenient. There are many locations across the U.S. and throughout New Jersey that you can further take advantage of.
This banking option allows you to make unlimited transactions. You can also make cash deposits of up to $5,000 for free each month. They provide online banking, escrow, and lending options for your LLC. There are also many banks across the country that you can use and so you will be able to find a location near you. An important advantage is that there is no minimum balance requirement. However, there is a minimum deposit of $250 to maintain the account.
Only one business member needs to apply for the LLC account, although your bank will likely still request the information of all LLC owners regardless. There are certain requirements the applicant needs to meet to be eligible to apply that is dependent on the bank you are applying with. An example requirement includes having 25% ownership in the company.
Once you’ve picked your bank and gathered the necessary documentation to create a business bank account, filling out an application is relatively easy. However, unlike with personal bank accounts, you often need to go in person to create a business account. Many banks do not offer online applications for business accounts.
Once you have opened your business account, the final step is to provide your account with funds. As with your personal accounts, you can do so by depositing cash, or a check, transferring funds, or utilizing another deposit method.
After you create your account, you also need to determine who is authorized to sign checks. If you are a multiple-membered LLC, you will need to decide whether you want every owner to be able to sign or only a select number of individuals.
Opening a business account only requires slightly more steps than opening your personal account. However, it provides many benefits and can simplify your record-keeping process. If you have any additional questions, check with your financial advisor for more information.