{"id":2096,"date":"2021-04-13T12:56:42","date_gmt":"2021-04-13T17:56:42","guid":{"rendered":"https:\/\/www.northone.com\/blog\/?p=2096"},"modified":"2024-07-04T13:17:41","modified_gmt":"2024-07-04T18:17:41","slug":"how-to-open-joint-bank-account-with-business-partner","status":"publish","type":"post","link":"https:\/\/www.northone.com\/blog\/business-banking\/how-to-open-joint-bank-account-with-business-partner","title":{"rendered":"How to Open a Joint Bank Account With a Business Partner"},"content":{"rendered":"\n

If you\u2019re starting a <\/em>new small business<\/em><\/a> with a partner, you\u2019re probably going to want a joint bank account. This article will walk you through what a partnership bank account is (and how it actually works), the pros and cons of having a joint bank account, and a step-by-step guide for how to get your joint bank account started. <\/em><\/p>\n\n\n\n

<\/span>What is a Joint Bank Account? <\/strong><\/span><\/h2>\n\n\n\n

A joint bank account provides both you and your partner (or partners) with equal access to bank withdrawals, deposits, and other financial transactions. Everyone who is a part of the joint account will also have a debit card associated with said account. When you\u2019ve started a company with a partner this allows you all to get your banking done simply and efficiently.<\/p>\n\n\n\n

But having a joint bank account also means having a lot of trust in the other people. Because everyone is able to control the money going both in and out \u2014 and where that money gets sent to \u2014 you want to make sure that everyone that has access to the account is on the level. Of course, if you\u2019re starting a small business with these people then hopefully that\u2019s something you\u2019ve already looked into.<\/p>\n\n\n\n

At North One we support joint business banking accounts and partnerships, although we may request partnerships documentation to verify your business.<\/p>\n\n\n\n

<\/div>\n\n\nApply for an Account<\/span><\/a><\/span><\/span>\n\n\n
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Let\u2019s talk about how to open a business bank account<\/a> and some of the advantages of doing so.<\/p>\n\n\n\n

<\/span>The Pros of Opening a Joint Business Bank Account<\/strong><\/span><\/h2>\n\n\n\n

As we mentioned, having a joint business bank account gives you and your partner equal access to all aspects of your finances associated with said bank account and \u2014 in many cases \u2014 the business in general. Here are some reasons why that might be a good thing. <\/p>\n\n\n\n

<\/span>Each Partner will have equal rights to the account:<\/strong><\/span><\/h3>\n\n\n\n

If one person in a business partnership is handling all of the finances, it can lead to resentment and frustration really quickly. It also sets people up for financial mistakes. By each member of a business partnership having equal rights to the account, it takes away much of this tension. It also means that there are two sets of eyes on your finances, meaning hopefully it\u2019ll be easier to catch any potential mistakes that might happen, and ultimately save you time and money. <\/p>\n\n\n\n

<\/span>Your business finances are consolidated into a single account<\/strong><\/span><\/h3>\n\n\n\n

Having all of your business finances in one account makes your life easier. A joint account means that the money for the business is all in one place, meaning you and your partner can pay bills and expenses from said account, making it simpler to budget and keep track of finances, see where money is going, and keep a record for bookkeeping purposes. It\u2019s particularly important to have good bookkeeping practices and the right tax forms for when you need to pay taxes. For example, you\u2019ll need to understand W-4 vs. W-2 tax forms<\/a>\u2014and that\u2019s just for starters.  <\/p>\n\n\n\n

<\/span>You\u2019ll have extra deposit insurance<\/strong><\/span><\/h3>\n\n\n\n

If something goes wrong and your bank closes then you\u2019ll have extra deposit insurance. The (FDIC) and the National Credit Union Administration (NCUA) provide $250,000 of insurance per depositor. If you\u2019ve got a joint account your deposits will be insured up to $500,000. <\/p>\n\n\n\n

<\/span>The Cons of Opening a Joint Business Bank Account <\/strong><\/span><\/h2>\n\n\n\n

While there are plenty of reasons why it\u2019d be good for you and your business partner to have a joint business banking account, there are also reasons why \u2014 for some people \u2014 that might not be the best idea.<\/p>\n\n\n\n

<\/span>Equal rights to the account can backfire if things are mismanaged<\/strong><\/span><\/h3>\n\n\n\n

While all partners having access to the account can be a positive thing, it also means if there are any problems it is an issue for everyone on board. If one partner has issues with financial management issues \u2014 say, bouncing checks or going into overdraft \u2014 those issues are now the problem of the group. Poor financial management on a joint business account can also impact a person who is applying for their own separate bank account later down the line.  <\/p>\n\n\n\n

<\/span>Asset protection is minimal<\/strong><\/span><\/h3>\n\n\n\n

It differs from bank to bank but depending on the terms of the account creditors might be able to come after funds from a joint business bank account to satisfy the debts of an individual partner. Having honest and frank conversations about your financial situation can feel somewhat awkward when speaking with potential partners, but it\u2019s a crucial step if you want your business to be successful. <\/p>\n\n\n\n

<\/span>If the business closes, dividing the assets can be more challenging with a joint account<\/strong><\/span><\/h3>\n\n\n\n

We all hope that our businesses succeed, but if for whatever reason two partners decided to move on from their company then dividing the assets in a joint account can be trickier than if each partner had their finances separate. <\/p>\n\n\n\n

<\/span>What documents do I Need for a Joint Business Bank Account?<\/strong><\/span><\/h2>\n\n\n\n