Choose a business bank account when setting up your company

When registering a UK limited company, one of your initial priorities should be to open a dedicated business bank account. While it’s not a legal requirement (contrary to some information you may find online), having a separate account is highly recommended for several reasons.

In this article, we explore these reasons and provide guidance on how to choose a bank account, whether you’re forming your company with us or have already set it up.

4 reasons why your limited company needs a business bank account

In today’s competitive business landscape, having a dedicated business bank account for your limited company is essential. Not only does it streamline financial management, but it also enhances your professional image and opens up opportunities for growth.

1. Separate your personal and business finances

The alternative to opening a business bank account is to use your regular personal account for business purposes. Preparing your tax returns will be more challenging, as you will need to separate personal and business transactions.

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A business account gives you immediate insight into your business’s financial wellbeing. In just a few clicks, you can see your company’s finances. Without this dedicated account, you will always need to manually calculate what’s yours and what belongs to the company.

2. Create a professional impression

One significant advantage of operating your business as a limited company is the professional image it conveys. If you request payments to be made into a personal account, you risk undermining the credibility you have established. Business contacts may doubt the quality of your services and question your legitimacy.

3. Utilise available features

Top business banks provide a variety of features to simplify managing your business. Online and mobile banking are now standard, and in addition, many banks offer integrations with accounting and invoicing software, access to business advice, and much more.

4. Obtain a loan

Most banks will not grant you a loan or line of credit unless you have a dedicated business bank account. Additionally, without a business bank account, you won’t be able to establish a credit rating for your company.

Form your company and pick a business bank account

UK Customers

As part of our company formation process, we offer free introductions to several business bank account providers. This means that if you choose to set up your company with us, you have the option to select what banks you’re interested in at the same time as forming your company. This is one of the many benefits of forming a company with us, rather than directly with Companies House.

Generally speaking, our UK-based customers can choose from the following banks:

• Anna
• Barclays
• Lloyds
• Zempler
• NatWest
• Monzo
• Tide
• Starling

The exact banking partners available to you will vary depending on your SIC code (the code that categorises the industry in which you’ll be operating).

International customers

Our overseas customers have the option to apply for a UK business account with Revolut, Wise or Payoneer.

If you purchase the Non-Residents Package, you will receive a referral to Revolut, Wise or Payoneer. This will allow you to open a UK bank account without needing to visit the UK in person. Alternatively, you can add a referral to Revolut, Wise or Payoneer at the end of the order process when purchasing the All Inclusive Package.

While we do not guarantee that your application to open a business bank account will be successful, as each bank has different opening criteria, our process simplifies your search for the right bank.

Selecting your bank whilst forming your company is simple

After selecting your company formation package (please note that we cannot provide a banking introduction with the Limited By Guarantee Package) and completing your payment, you will be guided through the company formation process.

Here, you appoint your company officers, allocate shares, and set your registered office address.

Once you have provided all the necessary company information required to form the company at Companies House, we will present the banks available to you in the ‘Business Essentials’ section of the process.

All you need to do is select the ‘Choose’ button next to the bank that you’re interested in, then continue through the process.

Before we submit your application to Companies House for approval, we’ll need you to provide the contact information for the person the bank should reach out to. This is especially important if your company has multiple officers.

Then, once your company has been formed, the bank will make contact and provide further information on opening your business bank account.

What happens if you don’t select a business bank account during the company formation?

You can still access the online introductions, even after setting up your company. Here’s how:

1. Log in to your 1st Formations account
2. Choose the ‘My Companies’ option
3. Select the appropriate company 
4. Click on the ‘Getting Started’ tab

You’ll then see a list of business bank account providers that we work with.

Choose the ‘Add To Card’ option next to any of the offers that you’re interested in, then proceed to the checkout to complete the order (no payment is necessary). You will then receive an email with further instructions.

Take the next step towards business success

Establishing your limited company with a dedicated business bank account not only simplifies your financial management but also enhances your professional image and opens doors to essential banking features and funding options.

Don’t leave your business’s financial health to chance. Explore how 1st Formations can support today, from seamless company formation to helping you manage your compliance tasks with ease.