One of the benefits associated with establishing a limited liability company (LLC) is the ability to open an independent bank account designated for the LLC as a standalone legal entity. Opening a bank account for your LLC is also a good business practice since it reduces the risk of coming ling business funds with personal funds.
Below are some preliminary considerations and prerequisites that need to be met in order to open a bank account for your LLC.
There are an array of different financial institutions available to LLC owners where you can open a business checking account. Each bank offers accounts with unique features, benefits, and even rewards (e.g., a bank-funded deposit after opening an LLC account and depositing a specific amount of funds).When making your bank selection, it is important to consider any fixed monthly costs associated with maintaining the account. You should also confirm whether there is a minimum balance requirement to keep the account open and active.
After selecting your preferred banking institution, determine what the bank requires in terms of paperwork necessary to open the account. In most instances, you will need to provide the bank two legal documents:
- the Articles of Organization for your LLC; and
- the employer identification number for your LLC
Let’s discuss each document in more detail…
Articles of Organization
The bank will likely require you to provide a copy of the signed Articles of Organization that you filed with the California Secretary of State (CA SOS). The California Revised Uniform Limited Liability Company Act (LLC Act) sets forth the components of Articles of Organization, which include:
- a statement of purpose declaring that the LLCwill be used for a lawful act or activity under the LLC Act;
- the legal name associated with the LLC;
- the address of the LLC’s designated office and/or mailing address,
- the name and address of the agent for service; and
- a statement of whether the LLC will be manager-managed or managed by a single member.
Employer Identification Number
An employer identification number (EIN) is necessary before an LLC can open a bank account.You can obtain your LLC’s EIN by filling out an online form with the Internal Revenue Service at https://sa.www4.irs.gov/modiein/individual/index.jsp.
Using the LLC Bank Account Properly
Once your LLC bank account is up and running, it is imperative that it is used exclusively for business transactions. The benefit of having an LLC bank account separate from your personal accounts is to protect yourself from potential personal liability for the debts and obligations of the LLC.
Have Questions or Need Advice on How to Open an LLC Bank Account? Contact an Experienced Business Attorney in Los Angeles Today
If you have questions or need assistance with opening a bank account for your LLC, contact the Hakim Law Group today. Our team of highly experienced and reputable business attorneys in Los Angeles stand ready to help your business get up and running. For further information or to schedule an appointment with an expert business attorney in Los Angeles, please contact The Hakim Law Group at 310-993-2203 or visit www.HakimLawGroup.com to learn more.