- A limited company is a separate legal entity, so it legally needs its own bank account, while a sole trader can use a personal one but usually shouldn’t.
- You’ll need your certificate of incorporation, company registration number, registered office, SIC code, and verified ID for every director and person with significant control before you apply.
- Applications stall most often over identity checks, a registered office that looks like a mail-forwarding address, or a mismatch between your application and what Companies House holds.
Knowing how to set up a business bank account comes down to three things: gathering the right documents, choosing the right type of provider, and making sure your application matches what Companies House holds about your company.
A limited company needs its own account because it’s a separate legal entity from you.
Get your paperwork lined up and a straightforward application can be approved in anything from a few hours to a couple of weeks, depending on who you bank with. Sleek handles the company formation side, so what your bank sees lines up with the register.
Does your limited company need its own bank account?
Your limited company must keep its money separate from yours, so in practice it needs its own bank account. The company owns its income and assets, not you, and mixing the two undermines the legal separation that protects your personal finances.
That separation isn’t just tidy bookkeeping. If company and personal money run through one account, you weaken the “limited liability” that makes a company worth having, and you make your year-end accounts far harder to prepare.
Sole traders are treated differently. You’re legally allowed to run a sole trader business through a personal current account, because you and the business are the same legal person for tax purposes.
Most banks’ personal terms don’t permit business use though, and separating the money still makes your Self Assessment far cleaner. So it’s a “can, but usually shouldn’t”.
What you need before you apply for a business bank account
Having everything to hand before you start is the single biggest thing that speeds up approval. Most delays come from a missing document or a detail that doesn’t match the register, not from the bank being slow.
Here’s what a UK provider will typically ask a limited company for:
- Certificate of incorporation: proof the company exists, showing its name and number. If you can’t lay hands on yours, here’s how to get your certificate of incorporation.
- Company registration number: the eight-digit number Companies House issued at formation. If you’re unsure where to find it, this covers your company registration number.
- Registered office address: the official address on the public register, which must follow registered office address rules.
- SIC code: the code describing what your company does. If you picked one at formation without much thought, SIC codes explained shows why it matters here.
- Director and PSC identity documents: a valid passport or photo driving licence, plus proof of address, for every director and person with significant control.
- Business details: your expected annual turnover and a clear description of what the business actually does.
Open the Companies House record for your company and read it before you apply. Whatever the bank pulls up needs to match your application word for word, especially the company name, address, and director names.
High street bank, digital bank, or e-money account?
The provider types differ in how fast they open, what they’re good for, and, crucially, how your money is protected. There are broadly three routes, and the difference between the last two catches a lot of business owners out.
|
Provider type |
What it is |
Typically good for |
Rough opening time |
|
High street bank |
A fully licensed bank with branches |
Cash and cheque handling, lending, established relationships |
Several days to a few weeks |
|
Digital-first bank |
A licensed bank that operates through an app |
Fast setup, low-cost everyday banking |
Same day to a few days |
|
E-money institution |
An FCA-authorised firm that issues electronic money |
Very fast onboarding, feature-rich apps |
Often minutes to hours |
A high street bank tends to want the most documentation and can take longest, but offers the fullest service. Digital-first banks strip that back for speed.
E-money accounts are usually the quickest to open, which is why business owners in a hurry reach for them, but they aren’t banks, and that matters for the next section.
Is your money protected? Banks versus e-money institutions
Money held with a licensed UK bank is protected by the Financial Services Compensation Scheme (FSCS), while money in an e-money account is not. This is the single most important distinction when you choose a provider, and it’s the one least understood.
What the FSCS covers
The FSCS protects eligible deposits up to £120,000 per person, per authorised firm, a limit that rose from £85,000 on 1 December 2025. Joint accounts are covered up to £240,000, and certain temporary high balances up to £1.4 million for six months. If a licensed bank fails, the scheme steps in and refunds eligible deposits.
For a limited company, this protection applies per firm, so splitting large balances across two separately authorised banks can increase your total cover.
Why e-money accounts sit outside the FSCS
An e-money institution (EMI) is authorised by the Financial Conduct Authority, not licensed as a bank, so it doesn’t take deposits in the legal sense and isn’t covered by the FSCS. Instead, EMIs must “safeguard” your money by holding it separately from their own funds.
Safeguarding isn’t nothing, but it works differently from FSCS cover and can be slower to pay out if the firm fails. Watch for one more wrinkle: some fintech brands have since gained a full banking licence, which changes their protection status, so check your provider’s current status on the Financial Conduct Authority register rather than assuming.
How long does it take to open a business account?
Timelines run from minutes to a few weeks, and the main driver is the provider type rather than your company. An e-money or digital provider can approve a clean application almost immediately, while a high street bank doing manual checks may take one to three weeks.
What actually slows things down is nearly always at your end. A document that doesn’t match the register, an identity check that needs a second attempt, or an unclear description of the business will each add days. The single fastest route is a digital or e-money provider plus a complete, register-matching application.
Why business account applications get refused or delayed
Most rejections and hold-ups trace back to a handful of predictable issues, and knowing them upfront lets you avoid them. Banks are cautious with newly formed companies because they can’t see any trading history yet.
Here are the usual culprits:
- Incomplete identity verification: a director or PSC whose ID check fails or stalls halts the whole application.
- A registered office that looks like a mail-forwarding address: banks flag addresses shared by hundreds of companies as a fraud risk.
- High-risk or vague SIC codes: certain sectors trigger extra checks, and a code that doesn’t match your described activity raises questions.
- Non-resident directors: an overseas director adds due diligence, covered below.
- Unclear business activity: “consulting” or “general trading” tells a bank very little and invites follow-up questions.
- Mismatch with Companies House: any gap between your application and the public register, even a slightly different company name, can trigger a refusal.
Identity checks deserve a special mention. Since 18 November 2025, identity verification for directors and people with significant control is a legal requirement at Companies House under the Economic Crime and Corporate Transparency Act, so this is now baked into the formation process.
That means banks increasingly expect the people on your application to already be verified on the register, and any gap shows up quickly. If you want more detail, here are the current identity verification requirements.
If you’re a non-resident or overseas director
Opening a UK business account as a non-resident is harder but far from impossible, and a few things noticeably improve your odds. Banks apply extra due diligence because they can’t verify an overseas director as easily, and some providers simply won’t onboard non-residents at all.
What helps most is a genuine UK connection and a clean, consistent paper trail. A UK registered office that isn’t a bare mail-forwarding box, a clearly described UK business activity, and completed
Companies House identity verification all reduce friction. Digital and e-money providers are often more willing to onboard non-residents than high street banks, though the FSCS distinction above still applies.
If most of your ownership sits abroad, registering a UK company from Europe sets out the wider picture.
Opening accounts for more than one company
Each limited company needs its own separate bank account, because each is its own legal entity with its own money. If you run a group or a holding structure, you can’t pool everything into one account without blurring the very separation that structure exists to create.
You can usually hold accounts for several companies at the same bank, and many business owners do. Just expect each application to be assessed on its own, with its own documents and its own identity checks. There’s no shortcut that lets one approved company wave the others through.
Switching business accounts: what to update
Switching provider is straightforward, but the admin around it is where things get missed. The account itself can often move via the Current Account Switch Service, yet the connections feeding into it won’t update themselves.
Work through this list when you move:
- HMRC direct debits and details: update the bank details HMRC holds for VAT, PAYE, and Corporation Tax payments.
- Payroll: point your payroll runs at the new account so salaries and pension contributions clear correctly.
- VAT and Corporation Tax: check any recurring payment arrangements are re-pointed before the next deadline.
- Accounting software feeds: reconnect the bank feed in your software so transactions keep flowing.
- Customers and suppliers: send updated payment details to anyone who pays you or that you pay on standing arrangements.
Miss one of these and you risk a bounced payment or a late filing, so treat the switch as a checklist, not a single click.
What to do once your business account is open
Getting the account open is the milestone, but a few first steps set your finances up properly from day one. The goal is clean books and no nasty surprises at year-end.
Start here:
- Connect the bank feed to your accounting software so every transaction is captured automatically. If you’re weighing up tools, this compares online accounting options.
- Keep business and personal spending strictly separate from the first transaction, never “just this once”.
- Make sure you’re registered for Corporation Tax with HMRC, which is a separate step from incorporation. Here’s how registering for corporation tax works.
Do these three early and your accountant, and your future self, will thank you.
How Sleek helps with opening a business bank account
Sleek doesn’t open the account for you, but it removes the thing that stalls most applications: a company side that doesn’t match the register.
From formation and registered office to Companies House filings and identity verification, Sleek keeps your company details clean and consistent, which is exactly what a bank checks first.
With accounting for your new company handled by qualified, in-house accountants, your bank feed, VAT, and Corporation Tax all stay joined up once the account is live.
Disclaimer: The preceding information is not legal advice. This content is aimed to provide general guidance. For more formal or legal advice, contact Sleek directly.
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FAQs on setting up a business bank account
Do I legally need a business bank account for a limited company?
Yes, in practical terms. A limited company is a separate legal entity, so its money must be kept apart from your personal finances. While no single law says “thou shalt open a business account”, you can’t legally mix company and personal money, and running everything through your own current account breaches most banks’ personal terms and muddies your accounts.
Can a sole trader use a personal account for business?
Legally, yes, because a sole trader and the business are the same person for tax. In practice it’s usually a bad idea. Most personal account terms forbid business use, and mixing income and spending makes your Self Assessment harder and your record-keeping messier. A dedicated account, even a basic one, keeps things clean.
Why was my business bank account application rejected?
Usually because something didn’t match or wasn’t clear. The common causes are a failed identity check, a registered office that looks like a mail-forwarding address, a vague or high-risk business description, or a mismatch between your application and the Companies House record. Fix the specific issue, make sure everything matches the register, and reapply.
Is my money protected in an e-money account?
No, not by the FSCS. E-money institutions are authorised by the Financial Conduct Authority and must safeguard your money by holding it separately from their own funds, but that’s different from FSCS deposit protection. Licensed banks, by contrast, protect eligible deposits up to £120,000 per firm. Check your provider’s status on the FCA register if you’re unsure.
Can I open a business account before my company is registered?
No. A bank needs your certificate of incorporation and company registration number, which only exist once Companies House has registered the company. Incorporate first, then apply. Some formation and banking services run the two steps close together, but the legal company has to exist before an account can be opened in its name.
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Do I need a UK address to open a business bank account?
Almost always, yes. Providers expect a UK registered office address, and ideally a UK trading address too. A registered office that’s clearly just a mail-forwarding box can itself trigger extra checks or a refusal. Non-resident directors can still open accounts, but a genuine UK presence and a clean address history noticeably improve the odds.
Can I have business accounts for two companies at the same bank?
Yes. Many business owners hold accounts for several companies with one provider. Each company is a separate legal entity, so each account is assessed on its own, with its own documents and identity checks. Being an existing customer can smooth the process, but it doesn’t remove the checks for the next company.
