When it comes to opening a bank account, there are some strict rules you must follow, and for good reason. Your bank account holds your hard-earned money, and you need to make sure that money is protected and secured.
As a startup, you will need to open a business bank account in order to separate your personal and business finances and run an organized business operation. If you don’t, you run the high risk of mixing up your budgets and cash flows, which will lead to a muddled audit trail, making tax season a nightmare. No one wants that. Additionally, keeping your business and personal bank accounts separate ensures that you are protecting your limited liability. Say, worst-case scenario, your LLC runs into financial troubles. By separating your personal and business assets, you can protect all financials that are not linked to your business (like your house, car, or savings). Protect yourself!
In order to open a business bank account, you will be required to provide a physical address.
Does it matter what kind of physical address? Yes, it does.
This article will cover what addresses are not accepted when opening a business bank account. Don’t make the mistake of applying to open a business bank account with any of these types of addresses. Read on to see why these addresses do not work and find out what does work.
A PO box, also known as a Post Office Box, is an independent, lockable mailbox located in a post office. The post office holds many PO boxes that can each be reserved and designated as the box to receive mail and packages. Once you reserve a PO box, either by signing up online or going into your post office and physically registering for one, you can redirect your mail by filling out a change of address form, and voila! Your mail will now arrive in your PO box, as long as the package can fit inside the box size you have chosen.
While a PO box may be helpful for receiving small pieces of mail and packages (just the basics and not a lot of mail or package volume), it will NOT be accepted when opening a business bank account. Banks are picky about the type of address you can use and a PO box is not considered a physical address, so it won’t work for opening a business account.
Mailbox Rental Store Addresses
Mailbox rental store addresses include private mailbox providers like The UPS Store, Postal Annex, PostNet, or any locally owned mailbox rental company. You will find these located in a retail center or plaza. You can rent a mailbox from one of these providers, and the address will simply be linked to the store address. With this option, you will be able to receive mail from all courier companies, get a real physical address, and have 24-hour access to your physical mailbox, so you can pick up your mail whenever it is convenient.
However, again, you cannot use a mailbox rental store address to sign up for a business bank account. The reason is that mailbox rental store addresses are tied to the store at which they are located rather than you, and therefore, banks will flag them as unsuitable for a business bank account address.
Registered Agent Address
Every business is required by the state to designate a registered agent. Your registered agent is responsible for acting as your official point of contact with the state, accepting service of process documents, and the like. In short, you need a registered agent to ensure you receive any and all service of process correspondence so that your business does not get in trouble with state rules and regulations.
There are multiple options you can choose from when it comes to designating your registered agent. You may use your own private home address and be your own registered agent (although, this is not recommended). You could also ask a friend or family member to be your registered agent, in which case, their address would be the address on file (also not recommended). Or - and this is the option VirtualPostMail (VPM) recommends you choose, you can hire a registered agent service, which will provide you with an official registered agent address and handle all of your compliance correspondence.
While there are many address options available for choosing your registered agent you cannot use your registered agent address to open a business bank account. The major function of a registered agent is to serve as a point of contact for your business with the state. Now, does this function extend to banks and banking agencies? Well, no. Not directly. Does this mean, then, that a registered agent cannot interact with a bank on your behalf? Again, no. A registered agent can, eventually, be a liaison between your company and your prospective bank.
Registered agents can’t act as your physical address for opening a business bank account (because it’s not their sole purpose), but they can communicate with your bank on behalf of your LLC.
Virtual Mailbox Services
Virtual mailbox services allow you to access and read your mail from anywhere in the world, as long as you have an internet connection and a device. With a virtual mailbox, your physical snail mail will be available to you digitally, and you have the ability to choose what to do with it - forward, shred, dispose of, store, deposit checks, etc. If you sign up for a virtual mailbox service, you will also be given an address to which all of your mail will be physically delivered.
There are a number of possibilities when dealing with banks who don’t like CMRA addresses (that is what the US Post Service calls mailboxes provided by third parties, such as UPS, Mailboxes, etc.)
First, remember that if you use a CMRA address for your company, it is the one address used on the Articles of Organization to help protect your identity. That doesn’t mean you’re stuck with using just that address for any and all business functions. Oftentimes, banks want a physical address in which business will be conducted in the state where you are located. That can be a problem if, for example, you’re trying to use a virtual mailbox that’s located in California when you’re located in Nevada. The answer here is to give the bank your actual address where you’re conducting business locally. The bank will keep this information anonymous so it won’t be published online and on public records.
As another piece of advice, if the bank won’t let you use multiple addresses for your business, then it’s recommended to try a different bank. A virtual mailbox doesn’t quite do the trick for opening and maintaining business bank accounts (although, it’s the closest out of the above-listed items) due to the fact that it doesn’t meet the requirements of what is defined as a “physical address” in the eyes of the banking industry. Banks are picky about their address, so, what can you use?
What DOES Work to Open a Business Bank Account? TruLease
Now that you know everything that doesn’t work for opening a business bank account, here’s what does. You didn’t think this article would only tell you problems and provide no solutions, did you?
TruLease allows you to get a physical address to open U.S. business bank accounts by helping you sign a legal lease agreement for an address (through building owners that VPM has partnered with to provide you with a real leased physical space), phone/in-person verification, and 30-day money-back guarantee. The TruLease plan comes bundled with a separate virtual mailbox service to receive your business, legal, and personal mail in one place.