Business Bank Account

[JaneFisher]

Hi, I have been the Director of a Limited Company which has been trading for about 3 years. I have recently formed a second company with another Director. However when I attempted to get a bank account this second Directors credit rating is too poor and the account was refused.

What are my options? Can I use the account I already have for my first company to manage the money of the second company? Can I set up a second account in the name of the first company to manage the money? If I remove the other person as a director and just make them a shareholder will they still be taken into account on any bank account application?

What is my best way around this?

[elainec100@cheapaccounting]

You cannot use the other company's bank account - the companies are separate and should be treated as such.

Have a word with the bank and see what route they suggest.

[Davem1234]

Hi Jane

You shouldn't use the other company's bank account as each company is a separate legal entity and as such the business transaction must not be merged. Similarly a number 2 account in the first company's name is not allowed.

I would probably remove the other director although I assume this will mean he cannot be a signatory on the account but you would need to check that out.

Whether the other director would want to be removed is another matter but if that is the only way forward then there may be no choice. His remuneration from the company needn't be reduced so other than the status there should be no problems.

Dave

[oldeagleeye]

If you don't need credit facilities simply get a non status bank accout from Natwest. They do one even if a person has CCJ's etc and remember. No-one these days has a worse credit rating than the banks themselves. Robert

[RobBellAutus]

You will know that using an account in your first company is not an option.

Removing the other director, if an option, should improve the rating but if you require multiple signatories, this person CAN still be a signatory on the account.

Also, as long as the account will always be in credit, there should be no need for credit checks (depending on bank policy of course). Have a look at the Co-Op...

[oldeagleeye]

Rob. EVERY Bank does a credit check and as well as to protect their own interest they are now forced to by government money laundering regulations . So even if you bung £20K into a savings account they will still do an Expedian check.

Natwest & I know Barclays do too do however offer a non-staus business account although if the check shows a bad credit history although they don't advertise it.

One of the reasons is that there are a huge number of company formation companies out there who pass on good business to the banks and as they do not advertise these accounts the company registrars can get £250 quid a pop for opening a non status account. Nice little perk.

Robert

[RichardW]

I think Alliance & Leicester do a similar thing