Can You Open a Bank Account With a DBA?
Navigate the process of establishing a business bank account when operating with a "Doing Business As" name. Understand what's involved.
Many individuals and small businesses seek to operate professionally without forming a complex legal entity. This article guides you through the requirements and steps involved in opening a bank account using a “Doing Business As” (DBA) name. This is a common practice for sole proprietorships and partnerships looking to separate business and personal finances.
Understanding a DBA
A “Doing Business As” (DBA), also known as a fictitious name, assumed name, or trade name, is simply a business name distinct from the legal name of the individual or entity that owns the business. For a sole proprietorship, the legal name is the owner’s personal name. For partnerships, LLCs, or corporations, the legal name is the one registered with the state. A DBA allows a business to operate under a different name for branding or marketing purposes.
A DBA does not create a separate legal entity. It is a registration that links the assumed business name to the actual legal owner. This means a DBA does not provide liability protection to the business owner, unlike forming an LLC or corporation. The primary purpose of registering a DBA is to ensure transparency, informing the public about the true owner behind a business operating under a different name.
Documents and Information Needed
Gathering specific documents and information is necessary before opening a bank account under a DBA. The primary document is proof of your DBA registration, often a certificate or filing receipt from the relevant state, county, or city authority. You typically obtain this from a county clerk’s office, a state business registration division, or the Secretary of State’s office, depending on local requirements.
An Employer Identification Number (EIN) is often required for business banking purposes. While sole proprietors without employees can use their Social Security Number (SSN) for banking, partnerships, corporations, and LLCs are required to have an EIN. An EIN is a unique nine-digit tax identification number issued by the IRS, similar to an SSN for individuals. You can obtain an EIN for free directly from the IRS website by completing an online application, which provides the EIN immediately.
Personal identification for the account holder(s) is required, usually a government-issued photo ID such as a driver’s license or passport, along with your Social Security Number. Banks request the business’s physical address, mailing address, and contact information, including a phone number and email. Some banks may also ask for proof of any general business licenses or specific industry permits that apply to your business type.
For business structures like partnerships, LLCs, or corporations operating under a DBA, additional organizational documents are needed. Partnerships need their partnership agreement to verify ownership. LLCs must provide articles of organization, and corporations require articles of incorporation. These documents confirm the legal entity that owns the DBA and identify individuals authorized to open and manage the account.
The Account Opening Process
After preparing all necessary documents and information, the process of opening the bank account can begin. A preliminary step involves selecting a banking institution that aligns with your business needs. Factors to consider include monthly fees, transaction limits, the availability of online banking services, and branch proximity if in-person transactions are frequent. Some banks offer specialized accounts with features like integrated accounting software or higher interest yields, which might be beneficial.
After choosing a bank, you can schedule an appointment or visit a branch during business hours. During this visit, you will present all gathered documents, including your DBA registration, EIN confirmation, personal identification, and any applicable business licenses or organizational papers. The bank representative will review these to verify your business’s legitimacy and your authority to open the account.
The bank will then provide account opening forms, which you will complete using details from your prepared documents. This includes providing the legal name of your business, the DBA name, the business address, and the EIN or SSN. An initial deposit is required to activate the account, with minimums varying by bank and account type, often ranging from $0 to $100. Some banks may offer incentives or waive initial deposit requirements as part of promotional offers.
Upon successful completion of the application and initial funding, the bank will activate your account. You will receive details for accessing your funds, which may include a debit card, information on ordering checks, and instructions for setting up online or mobile banking. This finalizes the process, allowing you to manage your business finances separately under your chosen DBA name.