Setting up your Business Bank Account

You have registered your business and now have an ABN (and other documents if you are a Company).

Your next step is to open a business bank account so you can differentiate business spend and income from personal spend and income.

Setting one up isn’t that difficult and in most cases free. You can most likely do it online too.

I would recommend using the same bank that you have your personal accounts with as it makes set-up a lot easier, you can (hopefully) see all your accounts in the same app and also transfer money into your business bank account from your personal account as a “loan” to spend on setting up and running your business before it starts making its own money.

Note:  having a separate business bank account isn’t mandatory for a Sole Trader but highly recommended to make it easier to separate business from personal during tax time. It is also cool to have your own business bank credit card in your wallet.

It is mandatory to have a business bank account if you are a Company.

How to get a bank account

It is simple as going online to your current bank's website, going to the 'Business' part of it, and finding the business bank account section.

You should open a Business Transaction Account now. You can consider a Business Savings Account later on when you are making money.

Most accounts are free to open and you can do it online online.

If you want to do it in person, just make sure the branch you are visiting covers business banking. 

These links are for the most popular banks in Australia and will take you directly to the business bank section (at the time of writing this article).

NAB

Commbank

ANZ

Westpac

Documents needed when setting up 

Sole Trader

If you are a Sole Trader you will need the following documents

• Your Business Name
• Your ABN
• Your business address
• Proof of Identity. Each bank has its requirements and you may not even need this if you already bank with them. Standard items like passport, driving license, birth certificate, bills with your address etc. If you are going into a branch to open an account, take them all to avoid disappointment.

Company 

As a Company, you will need the same documents as a Sole Trader plus some more dependant on the bank you are opening an account with. You would have got all of these legal documents from your accountant when you set up your business.

• Certificate of Registration of a Company.
• Other Company information (Share certificates, Appointment of Director, and Company Constitution).

If you are going into a bank branch to open an account, take all the legal documents you got from your accountant to avoid disappointment.

There may be some other nuance your bank account may want that isn’t covered above. Don’t panic, get what they need and get that account open.

Transferring money into your business bank account.

When your account is set up, you can then transfer money into the account to start using it to set up your business. These should be recorded as a “loan” to the business in your tax returns such that you can pay it back when you make money reducing your business’s income tax.

Please note that it may take several days for your business account to go live. In the meantime, you can still pay for items using your personal account (like Insurance which we cover in the next step). You will need to record them as a “loan” to the business when doing your tax return (or make your accountant aware of these so they can do it).

How to get a bank account

It is simple as going online to your current bank's website, going to the 'Business' part of it, and finding the business bank account section.

You should open a Business Transaction Account now. You can consider a Business Savings Account later on when you are making money.

Most accounts are free to open and you can do it online online.

If you want to do it in person, just make sure the branch you are visiting covers business banking. 

These links are for the most popular banks in Australia and will take you directly to the business bank section (at the time of writing this article).

NAB

Commbank

ANZ

Westpac

Documents needed when setting up 

Sole Trader

If you are a Sole Trader you will need the following documents

• Your Business Name
• Your ABN
• Your business address
• Proof of Identity. Each bank has its requirements and you may not even need this if you already bank with them. Standard items like passport, driving license, birth certificate, bills with your address etc. If you are going into a branch to open an account, take them all to avoid disappointment.

Partnership

There are similar requirements to a Sole Trader but you may also need the following.

• The Partnership Agreement
• Evidence of the Partnership (Meeting minutes etc).
• Your Partner(s) Proof of Identity. Each bank has its requirements so please check.

Check with your bank before to confirm exactly what you need.

Company 

As a Company, you will need the same documents as a Sole Trader plus some more dependant on the bank you are opening an account with. You would have got all of these legal documents from your accountant when you set up your business.

• Certificate of Registration of a Company.
• Other Company information (Share certificates, Appointment of Director, and Company Constitution).

If you are going into a bank branch to open an account, take all the legal documents you got from your accountant to avoid disappointment. I recall having to do two journeys because I left some of it behind thinking I didn't need it.

There may be some other nuance your bank account may want that isn’t covered above. Don’t panic, get what they need and get that account open.

Transferring money into your business bank account.

When your account is set up, you can then transfer money into the account to start using it to set up your business. These should be recorded as a “loan” to the business in your tax returns such that you can pay it back when you make money reducing your business’s income tax.

Please note that it may take several days for your business account to go live. In the meantime, you can still pay for items using your personal account (like Insurance which we cover in the next step). You will need to record them as a “loan” to the business when doing your tax return (or make your accountant aware of these so they can do it).