Bank Account for UK Companies: How to Choose the Right One for Your Company

Whether you are a new startup company or you are looking forward to expanding your business, a company bank account is what you will need. While a company bank account could offer your organization a lot of benefits, it is important that you choose the right one to enjoy these advantages.

There are several bank accounts that you could decide to choose within the UK, but you have to select the right one. In this guide, you will get to understand all you need to know for you to choose the correct UK bank account for your company.

How to Choose the Right UK Company Bank Account

When choosing a UK company bank account, it is important to consider some factors so you can choose the right one that will fit into your business needs. Here are some of the points to look out for when selecting a bank account for your UK Company.

1. Fees and Charges

Many banks have varying fees and Charges. However, most banks offer a charge-free period when you first open a bank with them. While this is good, you would want to check what their afterwards charges are like. Are there monthly charges on cash deposits and withdrawals, what are the rates of these charges and so on?

If your business is a new Start-up, you would want to consider choosing a business account that will offer you at least one year of free business banking, but be sure to note what charge rate you will be paying after the free periods. After this free banking period, most banks within the UK charge between £5 to £30.

2. Availability of a Nearby Branch

Even when online banking is available, at one point or the other, you might need to visit your bank to sort some things out. As a business owner, the ability to easily reach your bank when needed either physically or online is a great deal. As such you should consider if there is the availability of a bank branch in your business location before selecting a bank account.

3. Online Banking

An online banking platform allows you to manage your business finances and carry out some transactions from anywhere. It enables you to have some form of control over your bank account without having to visit the bank.  When you have a bank account app, you can choose to transfer, complete an online payment, reach out to customer service support and access other features. These days it is even possible for you to freeze your bank card if it is stolen or lost. With this, you can easily secure your bank funds even before reaching out to your bank.  While this is good, it is crucial to find out the efficiency of the online banking platform before selecting a bank account.

4. Customer Support Service

Great customer service support is important for your banking needs.  With that, it is important to check the customer support services that are available before selecting a bank account. Does the bank provide customer support service online, can you easily reach them through mail or calls or are there opportunities to chat with a representative from an online platform like a website? All of these are the things to check here. As a business, you would often need some kind of support even in the moments when you least expect it, so it’s crucial that you invest in a bank account that will suit this need.

Apart from that, if you would prefer that you visit the bank physically when you have a complaint, then you would want to choose a bank account that’s closer to your company location.

5. Availability of Software Integration

You would also want to know if the bank account has the ability to be integrated with software like QuickBooks. Integrating tools like these will help you ease your accounting activities and prepare you ahead of the tax period.

6. Transaction Limits

Companies are known to have more banking transactions than individuals. Because of this, you should consider opening a bank account that allows more business transactions within a given period. You should find out if there are limits to the volume of cash deposits and withdrawals that can be done within a period. Whether your company is a small startup or an established company, it is necessary that you select an account that will support more business transactions.

7. Availability of FSCS Cover

FSCS stands for Financial Services Compensation Scheme. It is important to check if a bank is covered by FSCS before banking with them as this scheme is there to protect your funds if the bank stops operation at any point. Not all bank accounts offer this, you therefore have to be sure before deciding on a bank account.

8. Card Payments

In a world where cash-free policy is becoming the order of the day, it is necessary to open a bank account that accepts card payments. While many bank accounts accept this, there are still some few that do not. It is therefore necessary to be sure of this before choosing a bank account.

9. Company Size, Type and Needs.

Company size, type and needs can also have a say in your bank account decision. If your company is a small-sized one with a minimal business transaction, your choice of business bank account would be different from a large-sized established business.

It is also important to consider your business type or structure and specific business needs before choosing a bank account. This can be discussed with representatives from a bank before you eventually choose a bank account.

Importance of Choosing the Right Bank Account

Choosing the right bank account for your company is as important as opening a bank account itself. While it could seem like a bank account should be opened urgently especially if you just incorporate your company, it is worth selecting the right one. Having the right bank account for your company helps ensure that you experience less stress when you eventually start carrying out your business transactions. It means you wouldn't have to worry about bank transaction limits or heavy monthly charges while operating your business.

The right bank account also allows you to carry out your business transactions as effectively as possible. Even when you have complaints, you are confident that there is personal support that will be provided to you. Apart from that the online banking platform is always at your tip for you to easily carry out banking operations from anywhere.

Overall choosing the right bank account for your company saves you a lot of time and effort in the long run as you won't have to bother about inefficient banking services. Moreso, it enables you to focus on your critical company goals rather than battling with one banking problem or the other.

How to Secure Your UK Company Bank Account

Your company bank account is an essential platform for your company because it helps you manage your business funds. It is therefore essential that you keep it secured all the time. Here are some of the points to keep in mind.

1. Monitor your banking activities

As a business owner, you must regularly monitor your bank statements and online banking platforms. You should regularly take a review of it to see if there are no fraudulent activities or a transaction that weren't initiated by your company.

If you notice a transaction that wasn't initiated by your business, be sure to report it to your bank earlier.

2. Reset your banking platform passwords regularly

You should also change your banking platforms more often. This is to ensure that you maintain an Accurate security for your bank apps. The password should contain upper and lowercase alphabets, special characters, and numbers to enhance more security. Do not also use a password that can easily be guessed by anyone like your company name.

3. Keep your devices secure

Whether you access your banking platforms with a mobile phone, laptop or any other device, be sure to keep the device secure always. Make sure that your device software isn't outdated as this could affect security. Also, you should be wary of using public WiFi for your banking activities as your banking information might not be safe with this.

4. Provide training for employees

If there are other shareholders, directors and employees who have access to your online banking platforms, then you would need to provide them with some form of training that will help increase their knowledge of all these security measures. The training should focus on how they can recognize online fraudulent activities, how to set a strong password, how to recognize scam messages and emails, how to keep company-sensitive information private and so on.

5. Be cyber-smart

As an individual who manages or controls a company's online banking platforms, you need to be cyber-smart as this would enable you to recognize activities that are fraudulent and prevent the company from losing.

Online scammers are always updating the tricks and tactics they use in carrying out their activities and so you must always be vigilant of all their acts. Banks will never ask you to provide your full password or ask for your card number. You should be able to recognize if a fraudster disguises as a bank representative to scam you through calls, emails etc. Being able to detect a fraudster means you are potentially preventing your company from financial loss.

Advantages of Opening a Company Bank Account

As soon as you incorporate your business within the UK, you should proceed to open a company bank account with a bank of your choice. Here are some of the advantages of having a company bank account.

1. Finance management

As a company owner, having a separate account for personal use and another for your business transactions helps you manage your company finances. You will be able to keep a track record of the expenses and income that's been generated by the business easily. You would not also have to start sorting out business and personal transactions as your company transactions would be in a separate account.

2. Compliance

Having a company bank account that is separate from your personal account makes your company stay in compliance. According to the Companies Act, limited companies and Limited liability Partnerships within the UK are considered as separate legal entities. As such the company finances must be managed distinctly and separately from the shareholder's own. If a company refuses to separate its funds from shareholder's personal funds, that simply means that the company has not been operating as a separate legal entity as it claims. Therefore, shareholder's properties and assets are not protected when the company runs into loss.

3. Access to Loan

When you seek investors from banks and through other channels, you are more likely to be granted the loan with a business bank account, than a personal account, so it's crucial as a business owner to have a separate bank account for your company. Apart from that, a business bank account presents your company as a more credible and reliable one.

4. Tax reporting

Having your company's financial transactions in a company account makes it easy for your company to easily generate bank statements for tax purposes. Apart from that it makes it easy for the financial accounts to be audited as the business transactions have been separated from all personal dealings.

5. Banking benefits

A Company Bank account unlike a personal bank account comes with lots of perks and bonuses. First, you have the chance to enjoy free banking for up to a year. Apart from that you have access to specialized advice, training and collaboration with top individuals from several industries. It is also common for banks to organize programs for companies to help them facilitate their banking and business activities.

Requirements to Open a UK Company Bank Account

Here are the requirements you would need to open a UK Company Account.

1. Means of Identification

You will need to provide a means of identity for the shareholders and directors of the company. This could be a driver’s license, passport and so on. A proof of address will also be needed and this can be a utility bill.

2. Proof of Business address

You can use your business utility bill, or lease agreement to prove your business address. This address should be a UK address otherwise you would need a registered office address.

3. Company registration number

Company registration numbers are usually located on the certificate of incorporation issued by the Companies House. This number is unique to your company and will be needed when opening a UK business account.

4. Details of business

Important information about the company structure, ownership, directors, shareholders, business operations, company products or services, expected annual turnover and many more will also be needed.

Conclusion

Company Bank accounts are important in helping you manage your business financial transactions. To fully enjoy the benefits associated with having one, it is necessary to select the right company bank account. Be sure to consider the points discussed above in order to choose the right bank account for your company. if you have any questions about how to choose the right bank account for your UK business, kindly contact one of our experts here, and we will do everything we can to help you.