Opening A Corporate Bank Account - By David Gass

After you form your corporation, make sure to call and organize regular shareholder and director meetings, as well as document important corporate decisions, like opening a corporate bank account. Otherwise, the courts and the IRS might decide that your business doesn't qualify as a corporation.

The establishment of corporate checking and savings account should take place by corporate resolution. Normal business records should be maintained for simple banking dealings such as writing checks or making deposits. Ledger entries, deposit slips, and the checks themselves are evidence these transactions.

Corporate accounts require a wide-range of documentation about the company and all documents have to be authenticated according to the bank's precise instructions. In order to assure your corporation is treated as a separate entity from its owners, the corporation must maintain separate bank accounts from its owners. What this means is you should not care for your corporation's bank accounts, checking or otherwise, as your personal accounts.

Required account opening information may include articles of incorporation, a corporate resolution by the directors authorizing the opening of the account, or the appointment of a person to act as a signatory for the entity on the account.

The bank, through its trust or private banking departments, is facilitating the establishment of a corporate entity for a new or existing customer. The bank frequently has ongoing relationships with the customers who initiate the establishment of a corporate entity.

The bank's Customer Identification Program (CIP) should detail the identification requirements for opening an account for a corporate entity. When opening an account for a customer that is not an individual, banks are permitted by 31 CFR 103.121 to obtain information about the individuals who have authority and control over such accounts in order to verify the corporate customer's identity.

Important financial transactions will be authorized at later meetings of the board of directors and properly recorded in the minutes. A corporate resolution authorizing a significant financial transaction, such as borrowing large sums and providing corporate property as protection for any loans, should be described in the minutes adequately to identify any specific transactions.

Corporate Resolutions are vital to the continued success and existence of a corporation. They are the unfailing protection of the company directors and shareholders.

As a general rule all records, resolutions and recorded minutes of your corporation should be kept for a period of no less than six years.

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