What is a Business Bank Account and How to Open One

As a business owner, one of the critical steps in managing your finances effectively is setting up a business bank account. This guide will walk you through what a business bank account is, why it’s essential, and how to open one, especially in the context of Singapore.

What is a Business Bank Account?

A business bank account, also known as a corporate bank account, is specifically designed for handling business transactions. It helps in keeping your business finances separate from your personal finances, which is crucial for maintaining clear financial records and ensuring efficient financial management.

What is a Business Bank Account Used For?

• Receiving payments from customers
• Paying suppliers and vendors
• Managing employee payroll
• Making business-related purchases
• Paying taxes

In contrast, personal bank accounts are typically used for:

• Depositing salaries
• Paying personal bills (utilities, rent/mortgage)
• Making personal purchases

Legal Requirements in Singapore

In Singapore, companies incorporated as Private Limited companies are legally required to maintain a separate corporate bank account. While sole proprietors and partnerships are not legally obligated to have a dedicated business account, it is highly recommended to keep personal and business finances separate for better financial management.

Features of Business Bank Accounts

Corporate bank accounts offer various features that cater specifically to business needs, which are generally not available with personal bank accounts:

• Corporate debit/credit cards
• Payroll services
• Cash management tools
• Integration with accounting software

Differences Between Business and Personal Accounts

How to Open a Business Bank Account in Singapore

To open a corporate bank account in Singapore, you will need the following documents:

• Completed Corporate Account Opening Forms
• Board of Directors Resolution
• Certified True Copy of Certificate of Incorporation
• Certified True Copy of Business Profile from ACRA
• Certified True Copy of Company’s Constitution
• Identity documents of directors and signatories

⚠️ Some banks might also require additional documents or an in-person meeting to finalise the account opening.

Compliance Benefits of Having a Corporate Bank Account

• Simplifies Tax Filing: Separates business income and expenses for accurate reporting.
• Access to Tax Incentives: Eligibility for schemes like the Start-Up Tax Exemption (SUTE).
• Double Tax Deduction Claims: Helps track expenses eligible for schemes like the DTDi.
• Progressive Wage Credit Scheme: Facilitates proper accounting for wage support claims.
• Investment Opportunities: Access to investment products.
• Demonstrates Transparency: Projects professionalism and adherence to best practices.

✅ At Counto, we prioritise your savings and efficiency over hefty fees. Our team of seasoned compliance professionals expertly handles everything from company registration and bank account opening, to tax filing at unbeatable rates. Discover more about our cost-effective incorporation packages here. 

Tips for Choosing a Business Bank Account

Fees and Requirements:

• Be aware of maintenance, monthly, and transaction fees.
• Research banks for fee waivers and benefits.

Introductory Offers:

• Look for banks offering sign-up bonuses or discounted fees.

Additional Services:

• Evaluate additional features like online banking and business credit cards.

Insurance and Fund Protection:

• Ensure the bank offers insurance and fund protection to safeguard your deposits.

Summary

Opening a corporate bank account is a crucial step in managing your business finances effectively. It not only helps in maintaining clear financial records but also offers numerous benefits such as protecting personal assets, simplifying tax filing, and improving business credibility. By understanding the requirements and choosing the right bank, you can set up an account that best suits your business needs.

Using an incorporation service as an extension of your team

Setting up a company in Singapore can be challenging, but with professional support, it can be simple, Counto’s mission is to support your new business, take away the complexities of compliance, and save you time and money throughout the year. Speak to us directly on our chatbot, email us at [email protected], or contact us using this form.

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