Opening a business bank account
The banking industry is required by law to comply with Know Your Customer (KYC) and Money Laundering Regulations (see here) and is therefore required to fully understand what your business does, how it is structured, where it is registered for tax purposes, how it is funded and who its directors and owners are. This includes where they live, where they are resident for tax purposes, nationality and date of birth. In some instances a bank may undertake further investigations which can include understanding the involvement of persons who hold a prominent public function in the business.
This is in order to fulfil the legal responsibility of a bank to help identify and stop criminals using financial products or services being used to move or process criminal funds.
The information required
The above means that for any business seeking to open an account the following information is required. This includes details of each partner, trustee and/or director and a complete understanding of the way the company is structured.
- Contact details
- Business name and address, (registered and/or trading), nature of business, including main country markets, and legal status
- Start date (if applicable), anticipated turnover and funding requirements
- Incorporation details (if a Limited Company)
- Whether the business is a partnership or limited liability company, or Trust and an overview of its ownership or holding structure if applicable: For example, if you have multiple businesses of which the business requiring the account is only one, or if the business you run is owned by another company (whether this be UK based or overseas), you will in each circumstance be asked the nature of the connection between these businesses and also asked to explain who the director(s), partner(s), owners or Trustee(s) are.
Certain types of business will have additional documentation requirements. The most common of these in the UK are listed below:
- Partnerships - partnership agreement or contract of co-partner
- Limited companies and limited liability partnerships – certificate of incorporation
- Clubs, societies, associations, churches or charities – a copy of the organisation’s constitution
- Trusts – the trust deed and any subsequent amendments
- New businesses and start-ups – your business plan and cash flow forecast
- Established businesses – two years’ worth of audited accounts
- Non ‘home bank’ customers – six months’ worth of business bank statements
Personal details (for all Partners/Directors/ Trustees/ Owners or any other person exercising significant control over the business)
- Personal name and address
- Date you moved into your home address
- Previous address details (if at current address for less than three years)
- Existing bank account details
- Date, country and city of birth; and country of nationality and residence
Some, or possibly all, of this information will need to be independently verified by the banks. While this may be done electronically, you may be asked to provide identity documents such as passports or driving licences for these individuals.
If you are an overseas investor, director or start-up you will need to provide equivilent documents to the above, for example: passport, ID Card, domestic residential address and bank details.