Business bank account

What it means

A business account is a bank account held in the name of a company or sole trader for business income and payments. Banks offer it with a separate price list and services such as multiple authorised users, links to accounting software or bulk payments.

For a limited liability company, its own account is practically essential. The company is a separate legal entity and its money belongs neither to the shareholders nor to the director. Payments from the company account need a business reason and a document; otherwise they are withdrawals that must be explained.

A sole trader is not legally required to have a separate business account, but we recommend one. It separates business money from personal funds, simplifies record-keeping and makes it easier to show in an audit which income and expenses relate to the business.

How it works in practice

When setting up a company, we recommend opening the account as early as possible, ideally before registration, to pay in the share capital. Right after that we set up exports of bank statements into the accounting software so payments are matched with invoices automatically.

When choosing a bank, we compare fees for the account, payments, withdrawals and cards, but also the quality of online banking and its link to the accounts. For a company with many incoming payments, the ability to match them by variable symbol can be decisive.

If the company takes a lot of cash, it deposits it regularly and observes the statutory limit on cash payments. It is sensible to run all larger payments through the account so there is a clear trail for audits and inspections.

What to watch out for

The most common mistake is paying private expenses from the s.r.o.’s account or vice versa. Such payments then have to be booked as a loan to the shareholder or their contribution, and if this is not dealt with, the tax authority may treat them as a hidden profit distribution.

The second risk concerns signing rights. If only one person can access the account, the company cannot even pay wages when that person is suddenly unavailable. It is wise to have two authorised users, with limits if needed, and to review regularly who has access.