1. What Is a DBA?
2. Opening a Personal Checking Account DBA
3. Guidelines for Setting Up a DBA Account
4. Is It Legal to Combine Personal and Business Funds?

A personal checking account DBA is a good idea if you want to do business under a different name than your own legal name. In some cases, it may even be mandatory. It is important to understand which types of businesses need a DBA, or doing business as, bank account and the steps involved in setting one up.

What Is a DBA?

When you open a business as a sole proprietor or partnership, the legal name of your company defaults to your own name. For this reason, sole proprietors and partnerships often file DBAs so they can operate under a different name. For example, if your name is Sally Smith and you want to call your business Sally's Place, you would need to register your DBA name with the appropriate state or local agency. Once you register as a DBA, you may need to open a DBA bank account.

Opening a Personal Checking Account DBA

Setting up a DBA bank account is simpler than the filing process for businesses that have a more refined structure. In fact, the process for opening a business account is similar to opening a personal account.

Sole proprietors can set their own guidelines for how they use their DBA account. They may use it to pay personal bills, for example. However, partners in a corporation have an accountability to separate personal and business funds. Regardless of which type of business you own, bookkeeping is much simpler when you use a DBA account to manage your personal and business income and expenses.

Guidelines for Setting Up a DBA Account

When setting up a DBA account, begin by researching several banks to find out which one offers the best benefits, such as online banking, fee structure, minimum balance. Then, determine if you can apply online to open your account or if you must go to the bank itself. If you own a telemarketing business, offer money services, run a gambling operation, or sell precious metals, you will need to open your account in person.

Ask an officer of the bank its requirements for initial deposit funds. Most banks accept cashier's checks from other banks or electronic transfers. You may also want to ask if the bank has any restrictions on using the funds for personal expenses should you so choose.

Make sure you have the proper documents on hand when you visit the bank to open your account. Under the Patriot Act, banks must check your identification if you are a new depositor. The type of documents you need depends on the structure of your business. Follow the general guidelines below:

  • Sole proprietors must show their Social Security card or if they have employees, their federally issued employer identification number.
  • Partnerships must provide their taxpayer identification number and their partnership agreement or business name filing document, such as a DBA form.
  • Corporations and limited liability companies must supply their taxpayer identification number and articles of incorporation.

Inquire about how long it takes to gain access to your funds. In some cases, banks withhold large deposits for a minimum of five days. Ask if the bank can provide access to a portion of the funds in the event you need them.

Provide the bank with an electronic copy of your company logo and ask the bank to have it imprinted on your checks. Then, find out the best way to access your account while you wait for your debit card and checks to arrive. Your bank may give you starter checks that have your account number printed on them in the meantime.

If your company operates as a separate legal entity, the law requires you to have different accounts for business and personal funds. As such, companies that operate under a DBA name or as an LLC or a corporation must have their own bank accounts.

A separate bank account is a good idea even if the law does not require your business to have one. Many complications can arise from using the same account for business and personal funds, such as:

  • Spending more than you earn
  • Improperly organizing your accounting records
  • Filing your taxes with inaccuracies
  • Missing growth opportunities for your business

You can use the statements from your DBA bank account to track your company's income and expenses, reconcile your books, track profitability and project cash flow.

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