How to Open a Bank Account for a Sole Proprietorship

14 Apr 2020

As a sole proprietorship, you can open a personal bank account for your company. Opening another bank account often helps for administrative purposes, because you can distinguish from your personal funds and your business funds. If you want to open a separate bank account, you can look into business bank accounts. For a business bank account your Sole Proprietorship will usually need a Federal EIN (FEIN) in addition to your business name. A Federal EIN or FEIN is a separate tax ID number that denotes businesses rather than citizens, like an SSN or ITIN for a business. Most banks offer both personal and business accounts, with business accounts usually handling higher volumes of transactions and having different types of services (such as a business teller line).

The advantage to opening a business bank account for your Sole Proprietorship is that it may separate your personal and business transactions, but the disadvantage is that you will have two separate bank accounts to track. For the purposes of taxes, your income and expenses will generally flow through you regardless.