How to set up a limited company bank account

Step 1: Understand why it is non-negotiable

Your company is a separate legal person; its money is not your money. Running company income through a personal account blurs the line, complicates your accounts, and can create issues with the directors' loan account and even the protection incorporation gives you. A dedicated account is essential, not optional.

Step 2: Gather what you need

Banks typically want proof of identity and address for directors, your company registration number and details, and information on the nature and expected turnover of the business. Having your incorporation documents and a clear description of what you do ready speeds approval.

Step 3: Choose the right account

Compare high-street banks and app-based challengers on fees, integrations with your accounting software, cash-handling if you take physical money, and lending appetite. A bank feed that connects to your books makes reconciliation effortless.

Step 4: Set up good habits

Route all company income and expenses through the account, keep personal spending out, and reconcile regularly. Consider a separate reserve account to ring-fence VAT and tax as it accrues.

Step 5: Build a banking track record

A clean, active business account builds the transaction history lenders look at. When you need finance, that history strengthens your case.

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