How to open a business bank account

11th August 2026

You’ve incorporated your limited company. You’re ready to start trading. But you’re missing something vital: a bank account.

As a legal requirement for limited companies in the UK, you can’t afford to delay this process. But, before you get started, there are a few things you need to know. 99p Company Formations explain below. 

Do you need a business bank account as a limited company? 

In the UK, limited companies are legally separate from their owners. You are therefore required to have a business current account to keep it separate from your personal finances.

Sole traders and freelancers are not legally required to have a business bank account, but it is highly recommended as it can help organise your accounts more effectively, particularly if your sole trader business doesn’t make up the majority of your income. 

Why do you need a business bank account? 

Having a business bank account will make managing your finances far simpler. You will have peace of mind knowing you can:

• Keep your business and personal finances separate: As a business owner, keeping your business and personal finances separate from each other will give you a clearer picture of what is going in and out of your business. You won’t need to conduct calculations unnecessarily in your spare time or accidentally spend your company’s cash on a personal expense and vice versa. 

• Track cashflow more efficiently: You will have a clearer picture of what your business is doing with its money. Tax payments will be easier to calculate and basic admin will require less time sifting through personal payments. 

• Build up your company’s credit score independently: It is important that you keep your business score independent from your personal credit score to increase your company's likelihood of being accepted for loans when you need them. 

• Easier to scale as the business grows: If you have a business bank account, it can make scaling easier if you decide to incorporate your service. 

• Avoid accountants looking through your personal effects: If you need additional support managing your business finances, having a business bank account will retain your financial privacy. 

How is a business bank account different from a personal bank account? 

Business current accounts and personal current accounts have more similarities

• Business perks: Banks often offer additional benefits to business accounts, including business advice. 

• Higher spending limits: Business current accounts are granted larger transaction limits including overdraft spending as opposed to personal bank accounts. 

• Manage multiple currencies: International businesses will have greater visibility over expenses in multiple currencies. 

• Employee bank cards: Banks allow businesses to assign business spend to specific employees and check business cards out in their name. 

• Scrutiny: Business bank accounts are subject to higher levels of scrutiny to ensure financial regulations are being met.

Do you need to pay for a business bank account? 

Not all business current accounts are free, depending on your choice of bank, the type of account you select, and perks or benefits you subscribe to. Before settling on a specific bank or account, speak to the bank itself and ask for a clear breakdown of all fees associated with the accounts you’re interested in and whether these are subject to change.

When comparing your options, pay attention to:

• Monthly fees: Some business bank accounts require a monthly account fee of approximately £5-£25, particularly for accounts that see higher spend. This fee can be waived for smaller businesses with low account usage. 

• Transaction fees: Transfers and international transactions may incur additional fees. 

• Add ons: Additional perks, additional cards, additional users, and introducing card limits can all incur extra fees.  

• Credit fees: Credit cards can be hugely beneficial if you aim to build your credit score, but if you can’t commit to timely repayments, you will be subjected to interest charges. 

• Accounting: Although not a requirement, you may wish to hire an accountant to manage your accounts which can ease your workload but bring additional fees.

The cheapest account is not always the most appropriate for your business so it’s important to weigh up the advantages and drawbacks of each option. Sometimes the additional fees associated with your chosen bank account can add a net benefit to your company spend. 

What do you need to open a business bank account? 

To open a business bank account for a limited company in the UK, you will need:

• Photo identification with your name and address 

• Your contact details 

• The legal business name and trading name 

• Your business’s legal address 

• Your business’s mailing address, if you have a virtual office

• The date you started trading 

• Proof of financial viability 

• Any previous business accounts 

• Companies House registration documents 

• Certificate of Incorporation 

• Your company registration number 

• Your credit rating 

How to open a business bank account 

You can open a business bank account either online or in person. You will need to be 18 or over, and be either the director or owner of the business.

To apply online:

• Visit the bank’s website 

• Fill in their application form 

• Read and accept any legal terms 

• Submit your application 

• Await approval 

• Order a physical copy of your card 

• Set up online banking

If you wish to open multiple accounts at once, the bank may request a phone call or face to face appointment. 

How long does it take to open a business bank account? 

It can take anywhere from 4 weeks to 3 months for your application to be approved. For this reason, it is vital that you begin the process as soon as possible following incorporation.

The application process will take around half an hour, if you are prepared.

Can you get a business bank account if you have bad credit? 

You can open a business bank account in the UK if you have bad credit but banks may be more cautious about accepting your application.

If you are concerned about your credit score, it can help to approach the bank with a highly detailed financial plan outlining your goals and how you aim to achieve them. 

Credit or debit? 

Debit cards operate in much the same fashion as a personal debit card. They are straightforward to use and easy to access. Credit cards, on the other hand, give you access to a line of credit that can help fund your business or pay for larger expenses if you don’t have the cash immediately on hand.

We would recommend always having a business current account, so the question you should ask is: Would a credit card benefit your business?

In many cases, having both a business current account and business credit account o could be the most beneficial option.

With clear preparation and the right information, registering a business and investing in its future with the right business current account can be a straightforward process. If you prefer a simplified, supported experience, 99p Company Formations offers fast, affordable incorporation services with optional add ons to help your business stay compliant from day one.

We offer full registration services that help you begin trading without the administrative hassle. Call us today to get started.

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