How to open a business bank account in Australia – 4 easy steps to set up!
- August 2, 2023
- 5 min read
Starting a new business is an exciting and rewarding venture, but it can also be overwhelming, especially when it comes to managing your finances.
One of the most critical steps in setting up your business is opening a business bank account.
A business bank account provides a secure way to manage your finances, track your income and expenses for tax purposes and manage cash flow, and separate your personal and business finances.
But with so many banks, account types, and requirements to consider, where do you start?
In this article, we will walk you through the steps to open a business bank account in Australia.
What is a business bank account?
Isn’t this the same as your personal bank account? No, it’s not.
Business bank accounts are a specialised type of bank account designed for business purposes. It is used to manage and transact the financial activities of a company such as receiving payments from clients, paying suppliers, depositing revenues, and other transactions.
Why should you open a business bank account?
A business bank account provides a separate account for a company’s finances, removed from the personal finances of the business owner or owners. This separation is essential for accounting, taxation, and legal purposes, as it allows businesses to keep track of their finances and maintain accurate records.
These types of accounts often come with features and benefits specific to businesses, such as the ability to process credit card payments, access to business loans, and deposit and manage large sums of money. Business bank accounts also offer online banking, mobile banking, and other digital tools to help businesses manage their finances more efficiently.
How do you open a bank account for your business?
Step 1: Choose a Bank
Choose a bank that best suits your business needs. There are several banks to choose from, and each offers different account types, features, and fees. Popular options include Commonwealth Bank, Westpac, ANZ, NAB, and ING.
When choosing a bank, consider account fees, transaction fees, ATM access, online banking features, customer support, and the bank’s reputation.
Step 2: Gather Required Documents
To open a business bank account, you need to provide documents such as –
- Your business name, registration number, and ABN (Australian Business Number)
- Your identification documents, such as a driver’s license or passport
- Your business registration certificate
- Proof of your business address, such as a utility bill or lease agreement
If you are opening a business bank account with a partner, they will need to provide their identification documents.
Step 3: Choose an Account Type
Once you have chosen a bank and gathered the documents, it’s time to choose an account type. Banks offer different types of business accounts, including transaction, savings, and merchant accounts.
Transaction accounts are designed for day-to-day business transactions, and savings accounts earn interest on surplus funds. Merchant accounts accept credit card payments from customers.
Consider your business needs and choose business bank accounts that best suit your requirements.
Step 4: Apply for the Account
The final step is to apply for the account. Apply for a business bank account online or at a bank branch.
During the application process, provide documents, choose an account type, and provide details such as the number of employees, annual turnover, and expected account activity.
Do you want to make it easy to set up a business bank account? Did you know Sleek can help?
Once your application has been processed and approved, you will receive your account details and can start managing your money.
Which bank is the best to open a business account?
In Australia, you are spoilt for choice.
The choice of business bank accounts will ultimately depend on your business banking needs, preferences, and priorities.
Compare different banks, their business account features, and fees, that best suit your business requirements.
Some banking services to consider when choosing a bank include:
- The bank account options offered –
- The fees associated with the business account, including transaction fees, monthly fees, and ATM fees – look for unlimited electronic transactions as these fees can quickly add up and eat into your profits.
- The interest rates offered on savings accounts or term deposits – check they offer competitive interest rates in line with the other banks.
- The online banking platform and features offered by the bank, such as mobile business banking, account integration, apple pay or google pay, automated payments, international money transfers, real-time tracking, and bank feeds to your accounting software – online transactions make it super easy to pay bills and run your business.
- The accessibility of the bank’s branch or ATM network – sometimes, you may need to meet in person.
- The quality of customer service and support by the bank – their customer reviews should give you a sound idea of their service or ask your work colleagues for any recommendations.
Some popular banks for business banking in Australia include Commonwealth Bank, Westpac, ANZ (Australia New Zealand Banking Group), NAB, (also called The Big Four), plus others such as ING, BankWest, St George, or you can try credit unions, community banks, rural banks or online or neobanks.
Can you open a business bank account online in Australia?
Yes, it is possible to open an Australian business bank account online. Major banks in Australia offer online account opening services for business accounts. The requirements and procedures for opening an account online may vary depending on the bank and the type of business entity.
Generally, to open an account online, you will need to provide information about your business, such as its legal name, business structure, ABN (Australian Business Number), business address, and the nature of the business activities. You may also need to provide identification documents for the business owners and directors, such as passports, driver’s licenses, or other forms of identification.
Additionally, some banks may require additional documentation, such as a business plan, financial statements, or other proof of the business’s legitimacy and financial stability.
Check with the bank of your choice to confirm the specific requirements and process for opening a business bank account online in Australia.
What documents do I need to open a business bank account in Australia?
This will depend on your business structure.
Check with the bank of your choice to confirm their specific requirements and any additional documents that may be required.
Our checklists outline the requirements for each type of business structure –
Sole trader bank account
To open a business bank account in Australia as a sole trader, you will typically need to provide the following documents:
- Your identification documents, one of these photographic documents such as your passport or driver’s license, or two of these non-photographic documents – Australian or foreign birth certificate, Australian or foreign citizenship certificate, and/or Centrelink pension or health card.
- Your ABN.
- Your business name registration certificate (if applicable).
- Your business registration documents, such as your business name registration or ASIC documents.
- Your tax file number (TFN) or exemption.
- Financial statements or tax returns for your business (if required by the bank).
Partnership
To open a business bank account in Australia for a partnership, you will typically need to provide the following documents:
- Partnership Agreement, which outlines the terms and conditions of the partnership.
- Australian Business Number and Tax File Number (TFN) for the partnership.
- Identification documents for all partners – one of these photographic documents such as your passport or driver’s license, or two of these non-photographic documents – Australian or foreign birth certificate, Australian or foreign citizenship certificate, and/or Centrelink pension or health card.
- Proof of address for all partners, such as utility bills or bank statements.
- Consent forms signed by all partners.
- Business plan or statement of purpose for the partnership.
- Financial statements or tax returns for the partnership (if required by the bank).
PTY LTD Company (Australian domestic proprietary company)
To open a business bank account in Australia for a Pty Ltd company, you will typically need to provide the following documents:
- Certificate of Registration of the Company issued by the Australian Securities and Investments Commission (ASIC).
- ABN, Australian Company Number (ACN) and Tax File Number (TFN) for the company.
- Identification documents for all directors and others authorised to operate the account, such as passports or driver’s licenses.
- Proof of name and address for all directors and signatories, such as utility bills or bank statements.
- Consent form signed by all directors and signatories.
- Business plan or statement of purpose for the company (if required by the bank).
- Financial statements or tax returns for the company (if required by the bank).
You may need to disclose –
The full address of the company’s principal place of business (if any)
The industry type of the business
Any tax residency information – including countries of residency and tax identification numbers
Tell us if the company earns more than 50% of its income from investing activities
Who needs to visit the bank with ID?
- You
- At least one director
- All beneficial owners
- Anyone else you’d like to operate the account
Trust
To open a business bank account in Australia for a trust, you will typically need to provide the following documents:
- Trust Deed, which outlines the terms and conditions of the trust.
- ABN and TFN for the trust.
- Identification documents for all trustees and beneficiaries, such as passports or driver’s licenses.
- Proof of address for all trustees and beneficiaries, such as utility bills or bank statements.
- Consent form signed by all trustees.
- Business plan or statement of purpose for the trust.
- Financial statements or tax returns for the trust (if required by the bank).
Who needs to visit the bank with ID?
- You
- Each individual trustee
- Each corporate trustee (if any)
- All beneficial owners of the trust
- Anyone authorised to operate the account
As there are different types of trusts and the complexities associated with them, check with the bank of your choice to confirm their specific requirements and any additional documents that may be required.
Opening a business bank account is an essential step in managing your business finances effectively. Streamline your financial management and focus on growing your business with Sleek. To open a business bank account in Australia, call us on +61 2 9100 0480 today or use our chatbox to ask a question.
FAQ
In Australia, you generally need to have an ABN to open a business bank account.
The amount of cash to open a business bank account in Australia varies depending on the bank and the type of account. Some banks may require a minimum opening deposit, while others may not have any minimum deposit requirements. Check with the bank of your choice to confirm their specific requirements.
While it may be possible to use a personal bank account for business transactions in Australia, it is not recommended. Mixing personal and business finances is difficult to keep accurate financial records, complicates tax reporting, and may even affect personal liability in the case of legal issues. It is advisable to open a separate business bank account to manage your business finances properly.
Yes, a sole trader can open a business bank account in Australia. It is recommended for sole traders to have separate business bank accounts to keep their personal and business finances separate. To open a business bank account as a sole trader, you will need to provide your personal identification documents, your ABN and any other relevant business documents.
Yes, an Australian company is required to have an Australian bank account. This is because Australian law requires that all financial transactions conducted by a company be processed through an Australian bank account. Additionally, having an Australian bank account provides a level of trust to customers and can make it easier to manage the company's finances, for local tax and regulatory requirements.
Disclaimer
This article is meant to provide general information. Tax regulations can be complex and subject to change, so it’s always best to consult a qualified tax professional or the Australian Tax Office (ATO) for specific advice tailored to your situation.
