Opening a Business Bank Account as a Sole Proprietor

The Sole Proprietor’s Guide to Opening a Business Bank Account

Can you open a bank account for a DBA/sole proprietorship?

Yes, you can open a business bank account as a sole proprietor using a DBA. A sole proprietorship is a business owned by one person where there is no legal separation between the owner and the business. A DBA, or “doing business as,” (also referred to as a trade, fictitious, or assumed name) is the name adopted by a business other than its true legal name. If Bob Smith, a sole proprietor, operates a business under the name “Premier Painting,” he needs to register the name as a DBA before trying to open a bank account. Usually, it is the secretary of state or the local county clerk that handles DBA registrations.

What does a sole proprietor need to open a business bank account?

It is actually pretty easy for a sole proprietor or DBA to get a business bank account. Some banks even allow you to sign up online. You just need to have the proper business documentation. Requirements vary, so it is a good idea to contact your bank to see exactly what documents you will need. Most banks have this information on their website. Generally, sole proprietors need to show:

  • A Social Security Number or Tax ID Number – Many sole proprietors may open an account with only their own Social Security Number (SSN) or their business’s Federal Tax ID Number. To get a tax ID number instantly, visit www.IRS.gov.
  • A Business License Business licensing requirements vary from state to state. Only a few states have a general statewide business license requirement. Most businesses are licensed at the city or county level. The Small Business Administration provides links to each state’s licensing directory http://www.sba.gov/content/what-state-licenses-and-permits-does-your-business-need.
  • An Assumed Name or Trade Name Certificate – If your sole proprietorship operates under a name other than your own legal name, you will need to show the bank an Assumed Name Certificate or a Trade Name Certificate. This is the certificate you receive from the state when you register your assumed name or trade name.

Sole proprietors don’t always have formal documentation for their businesses because they are not incorporated. If you operate under your own name, your SSN or Tax ID may be sufficient. You might also need to show your driver’s license, depending on the bank. If your business is operating as a DBA, the bank will need to see additional documents containing your name in association with the business name and your Assumed Name Certificate or Trade Name Certificate.

How do you open a business bank account?

Some banks allow you to open a business bank account online.  Other banks ask that you appear in person with your documentation to open the account.  If you aren’t sure, just call ahead or check the bank’s website regarding their specific requirements. Don’t waste your time making multiple trips to the bank when you should be focused on getting your business off the ground!