Can You Open a Business Bank Account Without an LLC? Everything You Need to Know

If you’re running a business as a one-person show, you might have wondered whether you can open a business bank account (and if it’s worth it).

In this business account guide, you’ll learn whether you can open a business bank account without an LLC. You will also discover what the business banking options are without an LLC for sole proprietors and entrepreneurs. Lastly, you will learn how to choose the right one for your business needs.

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Can You Open a Business Bank Account Without an LLC?

Yes, you can open a business bank account even if you don’t own an LLC.

While an LLC is one of the most common business structures in the U.S., it’s not the only business model that has access to business bank accounts.

Many freelancers, sole proprietors, and entrepreneurs operate their businesses with a business bank account. This can be the case even though they haven’t set up LLCs.

Generally speaking, the requirements are more or less the same to open a business bank account whether you’re a one-person operation or an LLC. That said, there are pros and cons to setting up a business account with each business model.

One of the main reasons to set up a business bank account without an LLC is if you’re concerned you’ll start to mix up your business and personal finances.

While in the beginning, you might be dealing with small sums and transactions, it doesn’t take long before filing taxes becomes more complicated. This is especially true when you have to filter through incoming and outgoing sums.

How to Open a Business Account Without an LLC

Opening a business account without an LLC is a similar process, but there will be some key differences in terms of requirements and the options available to you.

Requirements and Processes

The requirements for opening a business bank account will vary from bank to bank, but here’s a list of what you might need:

• Proof of identity - A government-issued personal ID is necessary when opening a business bank account, or a social security number if you’re applying as a sole proprietor
• Business name registration (DBA) - If you run your business under a name that isn’t your legal name, you’ll need a DBA registration
• Employer Identification Number (EIN) - Some banks will require that you provide your EIN which is issued by the IRS for tax purposes
• Business license (if applicable) - In some States and industries you’re required to have a business license to operate your business, and some banks might need to see this
• Initial deposit - Many banks will require a minimum opening deposit fee

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Now that you’ve gathered the necessary paperwork, here’s a quick step-by-step guide to setting up a business bank account without an LLC:

Step 1 - Select the Right Bank for Your Needs

Every bank is different, and your options may be limited if you don’t run an LLC.

With that in mind, consider some of the following factors before choosing a bank to set up a business account with:

• Small business perks
• App integrations and financial tools
• Transaction limits
• Fees (monthly, opening deposit, transactions)
• Online vs. brick-and-mortar

Step 2 - Submit Your Application

This first step will vary depending on whether you choose a brick-and-mortar bank chain or an online-only bank.

Use your paperwork and any relevant information about you and your business to fill out the application form. In some cases, you might also need to provide proof of business activity through invoices or a business website.

Step 3 - Deposit Your Funds

Once your application has been approved, you might need to deposit a fee to open your account. If not, it’s a good idea to do this anyway to start using your account and making the most of its features.

Benefits of Opening a Business Bank Account With an LLC

Since LLCs are one of the most common business structures in the U.S., there are more options and benefits when opening a business bank account.

As such, it might be worth considering whether incorporating as an LLC makes more sense for your business finances. The truth is, forming an LLC can give you a huge leg up financially and legally, and provide other professional perks.

Here are the benefits of opening a business bank account with an LLC:

Streamline Your Bookkeeping

When you start out in business, it can feel like all your energy should be focused on getting clients and growing as fast as possible. Unfortunately, though, that often means important processes like bookkeeping get left behind.

If you set up an LLC and open a business bank account, you can clearly divide your finances. This makes tax season much more straightforward and easier on your accountant (if you have one).

Boost Your Professional Credibility

As an LLC with a business bank account, you can upgrade your professional image so clients will take you more seriously.

There’s a certain positive assumption about an LLC with a business bank account that doesn’t always apply to freelancers and sole proprietors. As such, it could help you land more impressive clients and do business without fear of judgment.

Protect Your Personal Assets

An LLC is a fantastic way to protect your personal assets such as your savings, investments, and even your home.

Sole proprietor banking often leaves you liable as it’s common to use a personal bank account even for business.

The issue with this is that the liability falls on you if you get embroiled in a legal battle with a client. When you set up an LLC and a business bank account you can make sure the business fronts up any financial compensation sought by clients.

Upgrade Your Business Operations

By setting up an LLC and a business bank account, you can upgrade your entire business operations - both internally and externally.

You’ll have more options for the payment processors you use, more access to suppliers and vendors, and easier transaction options.

Open a Business Account Online and Take Your Business to New Places

A Wise Business account allows you to conduct business overseas with ease. Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. You can receive payments like a local with major currency account details. It’s an easy way to manage your business finances and keep a professional appearance with clients.

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With a Wise Business account, you’ll enjoy:

• No monthly fees
• International payments at the mid-market rate
• QuickBooks integration to track bill payments
• The ability to manage multiple currencies all in one place
• The option to hold over 40 currencies

	Editor & Business Expert:
	Panna is an expert in US business finance, covering topics from invoicing to international expansion. She creates guides and reviews to help businesses save time and make informed decisions. You can read more useful business articles on her author profile.

	Author:
	Sam is a UK-based copywriter with 4+ years of experience writing for SaaS and eCommerce brands. He creates comparison guides, informative blog posts, and covers other finance-based topics.