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Bank Account, business account or personal account

Bank Account, business account or personal...

I need some help, I have incorporated a company and I am now trying to open up a bank account. I am having problems opening bank account under directors names so was wondering if I can trade with a personal bank account under a personal name or do I need to have a business account in the companies name. Please help.


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03rd Jan 2013 22:21

If you have incorporated the company, then the bank account should be in the name of the Limited company, as otherwise HMRC could well argue that you have withdrawn the funds for yourself personally, and assess you to s419 tax and benefits in kind.

Most banks would insisit that it is in the name of the Limited Company.

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04th Jan 2013 09:11

What do you mean 'opening bank account under directors names '

Is one on the directors credit history so bad that the bank will not touch the company? - Try another bank or loose the director.

Are you trying to open an account in the names of the directors instead of the company? _ That's just daft.

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04th Jan 2013 09:44

No we are opening business account in company name but they have to do credit searches on all Directors, they say. It has come back declined however we don't know which director it has declined on.

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04th Jan 2013 09:52

Not ideal, but OK

It's perfectly acceptable, but not ideal for a company to operate it's banking though a personal account.  Arthur Phillips is correct that HMRC may look askance, but If there is no alternative go ahead, but take the following precautions.That way you should avoid trouble with HMRC.

get explicit agreement written to the arrangement from each of the directors and shareholders by passing an ordinary resolution giving approvalonly company money should pass through the account. Don't use it for directors' personal banking arrangments.tell the bank what you are using it for.



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04th Jan 2013 10:16

Maybe not acceptable

The precautions that Tony has outlined are designed to avoid the 25% s.455 (Arthur called it s.419) tax charge that would be levied on any balance in the personal bank account on the basis that it was money loaned by the company to the shareholder in whose name the personal bank account is held.  If you go down this route, you are standing into danger.

There have also been long discussions on this website about how you would show a personal bank account in the company's balance sheet.  Would you include an account in the name of an individual as an asset of the company, on the basis that the director is only acting as agent for the company?  Would the other directors be signatories on the one director's bank account?

Have you asked the bank why they have declined to open an account in the company's name?


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04th Jan 2013 13:39

Bank Account, business account or personal account

Sign up all the directors for an Experian (or similar) credit report, it's free for 30 days and available at a nominal fee thereafter. (As a director it's always a good idea to know your credit score). You'll soon determine which of the directors are holding you back and should ask that director to resign. I'ts not only going to affect your ability to open a business bank account but any credit application from a new business usually results in a credit check on the principals as well.


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