Start-Up Guide :: Business banking for contractors

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Start-Up Guide :: Business banking for contractors

Posted Sep 2, 2010

If you are setting up as a limited company contractor, one of the first things you need to do is to open a business bank account.

Business accounts typically offer far lower rates of interest than personal ones, and with the bank (base) rate at an all time low, you're unlikely to find good deals if you're searching on interest rates alone.

One thing you should always expect as a startup business is at least an initial period of time free of bank charges.

Most of the high street names offer an initial period of "free" banking to Startups. At the time of writing (Sept 2010), Barclays offer 2 years' free banking, Lloyds TSB offer 18 months' free, and similar deals are available elsewhere.

Other things to find out when choosing a business bank account are: Will you have access to a dedicated business account manager? What fees will apply when the initial "free" banking period expires, and make sure you have access to online banking (pretty much all major banks offer web-based access these days).

In terms of the practicalities of opening a new business account, you will need to provide your limited company certificate of incorporation, several forms of ID for company director(s), a list of eligible signatories on the account, and a mandate authorising the company to appoint the new banker.

You will often be invited to an initial meeting with your business bank relationship manager to find out more about your business, and to take care of the initial paperwork.

If the process of setting up a new account seems too much of a chore, luckily most contractor accountants will open one on your behalf as part of their initial offering to new clients!

Further resources

Bytestart's guide to choosing a business bank account

The British Bankers Association

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