Opening a Business Bank Account for an Alabama LLC or Huntsville Nonprofit

Sarah S Shepard - Business Bank Account

Opening a business bank account is an essential part of running a business and setting up an Alabama limited liability company or Huntsville nonprofit.

For both record keeping and protection of limited liability status, it is important that business funds pass through the LLC’s or non-profit business bank account.

Benefits of Using Business Bank Accounts to Conduct LLC or Non-Profit Business

Alabama non-profits and LLCs should open business banking accounts when the new companies are ready to start accepting or spending money as a business.

Common types of business accounts include checking accounts, savings accounts, money market accounts, and merchant services accounts (which allow LLCs and non-profits to accept credit and debit card transactions from customers).

Alabama LLCs and new nonprofits can open a business bank account after obtaining a federal EIN. 

Most business bank accounts offer a number of benefits that don't come with standard, personal bank accounts: 

  • Professionalism. Clients and customers can pay the business and make checks out to the business, instead of directly to the owner. This makes the limited liability company appear more legit and separate in the eyes of the public.

  • Record-Keeping. It is generally easier to keep track of business expenses and income when the money is kept in a separate account. That way, business funds are not mixed in with personal money.

  • Protection. Keeping funds in a separate business banking account offers an amount of personal liability protection because business money and nonprofit funds are separate from personal funds.

  • Delegation. The Alabama LLC’s owners or non-profit’s officers can authorize key employees to handle certain banking tasks on behalf of the business or charity.

LLC or Non-Profit Business Documents Needed to Open a Business Bank Account

To open a business bank account, the LLC owner or non-profit’s officers will need to go to a local bank branch and fill out their paperwork. The process is fairly simple, but my take an hour or more, depending on the bank. Typical documents needed to open an account are the following: