Business banking for a 17 year old

[PewPew]

Hi guys,

I'm a 17 year old guy, who is in the process of starting-up a business.

I've incorporated a Limited company, and now, I need a business bank account - for things such as merchant services - and due to my age, I have been declined by Alliance and Leicester.

Does anyone know of anyway in which an under-18 can obtain a business bank account? If not, should I ring a few banks? Can you suggest some banks?

Regards,
PewPew.

P.S Anyone whom states "your 17, you shouldnt be starting limited companies", please don't waste your time typing those posts, I'm fully aware of the risks associated with doing so, along with the taxes, etc.

[Jenni384]

Hi

As long as you know what running a Ltd Co entails, good for you and best of luck with your business.

There was a similar thread on this a few months ago, and I think the answer ended up being "Really sorry, you'll have to get your parentt(s)/ other adult to help you out until you're 18.

Being a Ltd Co, is there an adult you trust who you can make a director (but not a shareholder) until you're 18 to enable the company to get a bank account?

I don't specifically know of any banks that will provide business accounts to under 18s. However, there might be some other people along in a minute who know.

It can't hurt to ring a few and ask if they will consider your application after dislosing your age.

When are you 18?

As directors have to be over 16, it follows that some bank somewher should consider your application... but banks and logic don't necessarily go together! :p

Good luck

[Tommo]

P.S Anyone whom states "your 17, you shouldnt be starting limited companies", please don't waste your time typing those posts, I'm fully aware of the risks associated with doing so, along with the taxes, etc.

Good on you pal, all the best. However, as stated above, I think you'll have to get it in a parents name for the time being :(

[PewPew]

I had a worry I'd have to do that, but I'll ring Abbey, Barclays, Lloyds TSB and Natwest tomorrow morning to see what they say - I've already submitted an application to Barclays and I'm awaiting their response.

I'll tell you all what happens after I've done that tomorrow, otherwise I'll have to see what other alternatives I can take.

[PewPew]

Hi

As long as you know what running a Ltd Co entails, good for you and best of luck with your business.

There was a similar thread on this a few months ago, and I think the answer ended up being "Really sorry, you'll have to get your parentt(s)/ other adult to help you out until you're 18.

Being a Ltd Co, is there an adult you trust who you can make a director (but not a shareholder) until you're 18 to enable the company to get a bank account?

I don't specifically know of any banks that will provide business accounts to under 18s. However, there might be some other people along in a minute who know.

It can't hurt to ring a few and ask if they will consider your application after dislosing your age.

When are you 18?

As directors have to be over 16, it follows that some bank somewher should consider your application... but banks and logic don't necessarily go together! :p

Good luck

Sorry, I didn't quite answer anything you said!

I'm 18 in April.

I'll try to tell the banks tomorrow that I'm legally allowed to start-up a business, so hopefully, they will, at some point in the next month or two, realize I'm a potentially-highly-valued customer.

I guess I'm in for a long day tomorrow with the banks!

There are a few people here and there, that could be registered as a director, my colleague at my current place of employment has been interested in "doing some work for himself", and I'm sure my parents wouldn't mind as long as they didn't have to get involved!

I'll only consider it as a last resort though, I'd rather keep my Limited company to 1 director for now, it's less work to do to some extent.

Thank you for your replies.

[Tommo]

Just out of interest, what does your business do?

[*Lexxy*]

really like your attitude PewPew, hope you get a solution that works for you, good luck :)

[PewPew]

My business is offering web-based services, such as web hosting, game servers and dedicated servers.

I need the business bank account in order to obtain a merchant account.

If I fail to get a business bank account, I will see what my options are using a personal bank account and the payment services that do not require merchant accounts (Google Checkout, PayPal, etc.).

Either way, a solution will be found before the end of next week.

[Mpg]

My business is offering web-based services, such as web hosting, game servers and dedicated servers.

I need the business bank account in order to obtain a merchant account.

If I fail to get a business bank account, I will see what my options are using a personal bank account and the payment services that do not require merchant accounts (Google Checkout, PayPal, etc.).

Either way, a solution will be found before the end of next week.

Nice one mate.

A complete opposite to the post by another user at the weekend. Ray of sunshine and all the best to you in the future.


I have a 15yr old son who cant get his backside outa bed to go to school.

Well chuffed for you, good luck.

One word of caution though. The quickest way to lose a friend is to mix business with pleasure I'd be going after mum or dad as a director.

[Carl-CSNM]

My business is offering web-based services, such as web hosting, game servers and dedicated servers.

I need the business bank account in order to obtain a merchant account.

If I fail to get a business bank account, I will see what my options are using a personal bank account and the payment services that do not require merchant accounts (Google Checkout, PayPal, etc.).

Either way, a solution will be found before the end of next week.

You do realise the hosting industry is already very saturated? :D

You will need to be 18 to have a merchant account, PayPal or GoogleCheckout.

From my understanding you can't use a personal business account if you run are a ltd company, if you were a sole trader it would have been fine (as long as you didn't tell the bank).

[PewPew]

Nice one mate.

A complete opposite to the post by another user at the weekend. Ray of sunshine and all the best to you in the future.


I have a 15yr old son who cant get his backside outa bed to go to school.

Well chuffed for you, good luck.

One word of caution though. The quickest way to lose a friend is to mix business with pleasure I'd be going after mum or dad as a director.

Thank you for your post.

At 15, all I was really interested in was web development and design; so I spent the majority of my time doing that and learning about it. I ended up leaving school with very few qualifications.

But now, two years later, I'm in full-time employment as a web developer and in the process of starting my own business up (with help from my boss too, which is proving really useful).

I guess it proves that, regardless of how well you do at school, you can be fairly successful.

I appreciate your concern about mixing pleasure with business, and that it can cause more pain than it's worth.

I would much rather have a parent registered as a Director knowing they will have no involvement whatsoever.

It's also looking promising for a bank account from Barclays, just after submitting the application, I noticed a thing at the bottom that stated "credit is available to over-18s only", which, if I'm right in thinking, is implying the bank account is available to under-18s.

Time will tell though.

-----------

Hi Carl,

I do realize the hosting industry is already very saturated, however, the gaming side of it is still open to competition.

I know that I need a Business Bank Account for a merchant account, an merchant account provider has already phoned me to offer me an account (and he's aware of my age).

There are methods of getting around the age restrictions of PayPal and Google Checkout, I've been using PayPal since I was 16 with no queries as to my age.

I would of setup as a Sole Trader, but for some licenses I needed, I had to be a fully-registered company - a Sole Trader would not suffice.

Thanks to everyone who has replied so far.

[GRDCredit]

Clearly I am missing something here!:|

The OP has set up a limited company and so presumably it is the limited company that wants the bank account. I see no reason why this would be declined purely on the basis of age of one of the directors/shareholders.

The problem banks have opening accounts for under 18s is their (minor's) inability to enter into a contract - e.g. borrow money.

Where the OP may run into trouble is if facilites are required and the bank requires a guarantee as he would be unable to sign a legally binding one until his next birthday.

[PewPew]

Clearly I am missing something here!:|

The OP has set up a limited company and so presumably it is the limited company that wants the bank account. I see no reason why this would be declined purely on the basis of age of one of the directors/shareholders.

The problem banks have opening accounts for under 18s is their (minor's) inability to enter into a contract - e.g. borrow money.

Where the OP may run into trouble is if facilites are required and the bank requires a guarantee as he would be unable to sign a legally binding one until his next birthday.

Then I must be missing something too.

I sent an application to Alliance and Leicester, and I ticked the box stating "No, I do not want an overdraft or loan facility".

This morning, I recieved a letter stating "We are sorry, but we are only able to offer the requested bank account to over 18s".

I selected a Business Current Account - which, the last time I checked, was the correct one for a limited company.

I will see what Barclays says about my application to them however.

And of course, I'll ring Alliance and Leicester in the morning so I can clear this up for everyone who may see this topic.

[Chunkford]

And of course, I'll ring Alliance and Leicester in the morning so I can clear this up for everyone who may see this topic.

I think they will say because a business account can have the facility to have credit then they can only offer it to over 18's.
Just a guess....

[PewPew]

I think they will say because a business account can have the facility to have credit then they can only offer it to over 18's.
Just a guess....

They had the option (which I selected) to remove that facility.

[Mpg]

They had the option (which I selected) to remove that facility.

Yes but the banks want you to have this facility.:D

It does seem daft that you can have a LTD company but cant have a bank account.

[Chunkford]

very daft, but they do run the uk.... sorry the world!

Its probably because no one has programmed the computers to take in account a min age for services like that. So they take the easy route and don't offer it.
Computer says no.....

Anyhow, with your attitude you will find a way round even if its for the short term. If there's a will there's a way!!
Good luck!!

[Jenni384]

Regards running a personal account:

This is not technically correct. However, it's possible.
Not a popular choice and I always recommend my clients get a dedicated business bank account.

However, especially where a sole trader has incorporated, there may be a period of time when the Ltd Co bank is not open and thus the old sole trader one is still being operated on behalf of the Ltd Co. As a temporary measure this is fine.
The main issue with this, is everything going in and out of the individual person's account is an entry on the directors loan account and the usual rules would apply, the main one being if you "borrow" more than £5000 at any one time this has tax implications.

If the worst comes to the worst, this could be an interim measure until you turn 18 in April. I realise this is not technically correct but it's an option, as long as you run it by your accountant first. I think getting a trusted family member to be a director and help you therefore get a Ltd Co bank account is probably more favourable, and then they can resign once you turn 18.

[Gillie]

You are by law a minor until you reach the age of 18 and again by law you are not therefore old enough to enter into a contract that can be held against you, therefore banks will not issue you with a business account. The idea being that you are issued with a cheque book and you might write one out without funds to pay the cheque, therefore incurring debts, which until you are 18 you cannot pay back.

If you notice with personal accounts under the age of 18 you are not issued with anything more than a solo style card, which means you can only remove money from the account that you have actually got in it, no cheque book etc and no chance of getting in debt, as of course, being a minor, the banks can't chase you to repay them, therefore they are not going to allow you to get one.

And of course whilst you say you will not get in debt - the banks cannot rely on this, so risk assessment has told them over the years that they will not offer these facilities to minors.

As stated by Jenni, you need to get a trustworthy person to take care of this or wait until you are 18 in April.

[MASSEY]

if you are a limited company you can appoint a secretary who can do everything on your behalf, if you got your mom down as a secretary you might be able to open business account in her name and change at a later date, dont quote me though.

[Stockblue7]

Hi there

I am 22 and also the director of a Ltd company. What i found when trying to obtain a business account with no facility which i stressed to be the case because i didn't require credit, i was told that they tend to shy away from it because there are all sorts of easy ways at obtaining the credit once you have a foot in the door and account. The previous directors of the business went through some credit problems and ended up leaving the business with the current account being closed down. I am now finding it impossible to get a business account from anywhere due to the mark they have left. Also i would always suggest to call and speak to banks as online applications will have you waiting for weeks and will only get you as far as making the phone call in the first place. Good luck.

[MASSEY]

Clearly I am missing something here!:|

The OP has set up a limited company and so presumably it is the limited company that wants the bank account. I see no reason why this would be declined purely on the basis of age of one of the directors/shareholders.

The problem banks have opening accounts for under 18s is their (minor's) inability to enter into a contract - e.g. borrow money.

Where the OP may run into trouble is if facilites are required and the bank requires a guarantee as he would be unable to sign a legally binding one until his next birthday.

You can set up a ltd business name but its still the person everything is based on his business needs an account but it is still basically him that needs the account, if you start a business and lets say your credit rating is awfull they will be reluctant to give you anything its based on the person not the business name.

[PewPew]

If you would like me to add further confusion to this, my bank has issued me with a full cheque book to use as I want.

[PewPew]

Barclays have 'sort-of' accepted my application.

I confirmed my date of birth, and after that, I was told, "we will issue you with a cheque book and debit card".

I've got a meeting with my very own "personal banking adviser" next week to open the account.

So by sounds of it, if you're under 18, and want a business bank account, go to Barclays.

They've even said I may be able to obtain a merchant account, but they'll have to "review my circumstances" due to my age.

[Jenni384]

Barclays have 'sort-of' accepted my application.

I confirmed my date of birth, and after that, I was told, "we will issue you with a cheque book and debit card".

I've got a meeting with my very own "personal banking adviser" next week to open the account.

So by sounds of it, if you're under 18, and want a business bank account, go to Barclays.

They've even said I may be able to obtain a merchant account, but they'll have to "review my circumstances" due to my age.

That's brilliant news!

Thanks for the update and good luck :)

[PewPew]

As promised, my reply is here.

Barclays have given me a business bank account, with 12 months free banking. I had a meeting with one of their managers/advisers this morning, and in a few days, I should receive my debit card, and all other related things.

If you're 17, and want a business account, simply go to Barclays! (That is, if you can't get one anywhere else)

[Jenni384]

Excellent! Pleased to hear it.

Thanks for updating the thread, it's really useful for other people who may have similar questions in the future. :)

[Mpg]

Nice one.

So are you all set then.

Good luck

[PewPew]

Nice one.

So are you all set then.

Good luck

I'm not quite set just yet.

Next move, is to get a merchant account, which I assume is harder to get than a business bank account.

I'll also inform UKBF of the merchant account provider I manage to get a merchant account from.

[MASSEY]

ok well you have done the easy stuff now......, the hard part is getting the bank balance up lol