If you run a limited company, getting a business bank account is a legal requirement as it’s a separate entity so its finances must be kept apart from your own. There are lots of accounts to choose from, including free and paid-for options, and many have functionality that makes running a business easier, such as the ability to send and track invoices. Here’s what you need to know about opening a bank account as a limited company and the accounts on offer.
Latest reviews of business bank and e-money accounts for limited companies
Monzo offers 2 options with its business accounts. Monzo Lite is its free tier, which is a basic business account. If you like what Monzo has to offer you could get the Pro account for £5 per month. It comes with more features, such as integrated accounting with Xero, QuickBooks and FreeAgent. You can also create invoices and have account access and payment cards for up to 2 other people. It lets you set up a Tax Pot and put aside a percentage every time you get paid, which is handy if you worry about taxes. Both versions come with a business debit card which you can add to Apple Pay and Google Pay, 24/7 customer support and instant notifications, among other things.
Pros
Fee-free spending abroad.
Custom payment links.
Pots to separate money.
FSCS protected.
Cons
No branches.
Charge to deposit cash.
Accounting software only available with Pro account.
Tide's business account is designed for companies of all shapes and sizes, including limited companies. It offers 4 different pricing plans, including a free option, so you can choose the one that best suits your company. The most expensive plan is the most comprehensive, and offers three expense cards for your team, cashback on card purchases, exclusive member perks, a dedicated account manager and a 24/7 legal helpline. But whichever plan you choose, you will also benefit from being able to sync your account with accounting software such as QuickBooks, Xero and Sage, as well as automatically categorise transactions, and send, pay and track invoices. There are no fees for spending on your card abroad, while cash withdrawals cost £1. Opening an account can take as little as 10 minutes and no credit checks are carried out. Your Tide card should arrive within 2 to 4 working days.
Pros
24/7 customer support
Categorised spending
FCA regulated
Quick set-up
No monthly fees
Easy to manage accounts and track payments within the app
Ability to set up direct debits and standing orders
No annual or monthly fee when you apply using the Finder link.
It's easy to open a business account with Zemplar Bank. In fact, you can sign up in as little as 4 minutes as there is no credit check to worry about. There is also no monthly account fee and no fees for UK purchase transactions. Once your account is up and running, you can deposit cash via bank transfer or the Post Office, use your card online and instore or to withdraw cash, pay bills and expenses online and categorise spending on the go via the app. In addition, account holders can track expenses and block certain transactions, order up to 20 additional cards which can be managed using a centralised management system, and download statements for each card in CSV format online. You can also integrate your account with accounting software. Funds are protected up to £85,000 by the Financial Services Compensation Scheme.
Pros
Open an account in 5 minutes
"Cashplus iDraft" once eligible
Currency cards for travel
Online services in addition to the mobile app
Cons
Charge to have your bank card issued
Traditional bank still needed for majority of your business finance needs
Sign up today and unlock 1 month of a paid plan without subscription fees.
Revolut’s business account could be ideal if you’re a limited company that regularly does business overseas. The account lets you receive, hold and exchange money in more than 25 currencies worldwide with no hidden fees. You can set up as many sub-accounts in each currency as you need. Additional features include the option to make bulk payments, set up recurring payments, create and track invoices, and integrate your account with accounting software like Xero, Slack and QuickBooks. Choose from either a no monthly fee account or pay a monthly fee to benefit from even more extras. To get started, simply download the Revolut app and fill in a short form. Accounts can be opened in as little as 10 minutes and come with both virtual and physical debit cards.
Pros
Flexible account options
Mobile app with lots of good features
Ability to issue cards to all employees
Easy to apply
Freeze card if lost or stolen
Safe and secure
Free purchases
Cons
Basic account does not include many free transactions
£5 per month (waived if balance stays in credit and averages over £10,000)
Arranged overdraft
Requires credit check
30 months’ fee-free monthly and transactional business banking for switchers.
Switch to this account from TSB and you’ll be able to enjoy 30 months of fee-free business banking. This means there will be no monthly fees or charges for paying money in or out of the account for two and a half years. You have the option to add a business debit card to your account and you’ll be able to manage your account via the app 24/7. Cash and cheques can be paid into Post Office branches and TSB branches, plus you’ll get 12 months’ free access to Enterprise Nation for tailored advice from industry experts.
Pros
Free everyday business banking for 30 months
Free Square Reader
Access to payments app
Advice service
Cons
Monthly service charge applies after 30 months
Fees apply to certain transactions
Accounting integrations
FreeAgent, QuickBooks, Sage, Xero
Account fee
£5 per month (waived if balance stays in credit and averages over £10,000)
On application (subject to status, eligibility and The Co-operative Bank's Lending policy)
Requires credit check
The Co-operative Bank’s Business Directplus account is for businesses of all sizes. There’s no monthly fee for the first 30 months if your balance remains above £1,000, then it’s £7 per month after that. It offers free automated and manual credits, debit card purchases and cash withdrawals. The account comes with free access to Go Get Paid, which allows for easy payments and invoicing, as well as integration with accounting software such as Quickbooks and Xero. If you aren’t so sure on digital-only banks then The Co-operative Bank could work for you as it offers in-branch banking and support.
Pros
Free bank transfers
Access to a payment app
Multiple ways to bank
Cons
Monthly service charge applies after 30 months
Only suitable for sole traders or single directors
Fees apply to certain transactions
Accounting integrations
QuickBooks, Sage, Xero, Multiple providers
Account fee
Free
Arranged overdraft
On application (subject to status, eligibility and The Co-operative Bank's Lending policy)
Earn 10% cashback on your first $1,000 of international transactions with Airwallex (T&Cs apply).
The Airwallex Global Business Account is a great option if you need to do business overseas. It comes with no foreign transaction fees and lets you receive payments in 12+ currencies. You can open an account with local bank details in more than 40 countries and you can make transfers to around 150 countries, in over 40 currencies. It’s not just a global account and has standard business account features that users would expect, including synced transactions to Xero and the ability to manage and approve spending for your business. For those who like security with their innovation, Airwallex is regulated by the Financial Conduct Authority (FCA) and holds an Electronic Money Institution licence.
Pros
Send to 120+ countries
Competitive FX rates
No monthly account fees
Collect, hold & send money in several currencies
No transaction fees for card payments
Cons
Not covered by the Financial Services Compensation Scheme
Transfers can only be made to your Airwallex wallet or to a business bank account
Access to products and benefits on accounting software, insurance and more.
If you're looking for a business account for your limited company, you can apply for the HSBC Kinetic account in a matter of minutes via the app. There's no monthly maintenance fee for the first 12 months and you'll also be able to apply for an overdraft of up to £30,000. In addition, there is the option of a business credit card and a business savings account. Users can manage direct debits and standing orders on the account, freeze and unfreeze their debit card, analyse spending with automatically categorised transactions, and keep track of their finances with a monthly breakdown of cash flow. You will be able to scan and deposit cheques via the app, and make payments of up to £25,000 per day. Larger payments can be made via business telephone banking. The account can be accessed on your mobile or on your desktop.
Pros
Easy to apply for and manage
Arranged overdraft
Useful app features to help you track spending
No monthly fee for 12 months
Cons
Interest is charged on overdraft
Monthly maintenance fee applies after first 12 months
Up to £50,000 subject to eligibility and application
Requires credit check
This business bank account from Starling could suit limited companies thanks to its lack of fees. There is no monthly account fee, no UK payment charges and no fees abroad either. Applying via the app is easy and you'll also get free 24/7 UK support via the app, phone or email. Account holders can benefit from integration with accounting tools including QuickBooks, FreeAgent and Xero, automated business spending categorisation, receipt capture, and international payments. Provided you're happy to pay a fee, you can also customise the account with add-ons. These include the Business Toolkit which helps you create and send invoices, calculate tax, record your VAT and submit your VAT return, a Euro business account for exchanging and holding euros, and a US dollar business account for holding, sending and receiving US dollars. Your money will also be protected under the Financial Services Compensation Scheme.
Pros
Add the new Business Toolkit onto your free Starling account and get the first month free of charge (RRP £7pcm)
Completely free UK current account opened and ready to use in 20 minutes
Safe and secure
Fully licensed by the FCA and PRA
Free to use your card abroad including ATM withdrawals, splitting the bill made easy with "settle up" feature, competitive and comprehensible overdraft fees
Decent interest rate paid on current account balances
Efficient app offering a range of good features such as budgeting tools and saving features
Has a marketplace offering competitive pensions
Mortgages and insurance from other growing fintech companies
Teen account options
24/7 customer support (for all types of enquiries)
Cons
Relatively new so does not offer every feature, e.g. mortgages
No bank branches, all done via the web
Only available to UK residents
Accounting integrations
FreeAgent, QuickBooks, Xero
Account fee
Free
Arranged overdraft
Up to £50,000 subject to eligibility and application
Our expert says: How business bank accounts help you run your limited company
"When you’re opening a business bank account you can either choose one from a traditional bank, such as HSBC or Lloyds Bank, or one of the digital-only challengers, such as Starling Bank or Tide. Whichever you choose, they all have specific features that make running a business easier.
HSBC Kinetic gives you a monthly breakdown of your cashflow, which can be categorised into different types of spending, and the app lets you scan and deposit cheques into your account. Lloyds’ business accounts let you access its business management team or a relationship manager if your business is larger, and there are online resources to help you hone your business skills.
Starling Bank, launched in 2014, is a digital-only bank that lets you operate your account via an app or online. As with accounts from the other newer banks, its advanced technology gives you extra functionality that you don’t usually get with a traditional bank, such as the ability to integrate with accounting software such as Zero and QuickBooks. You can apply for an account from the app.
Also a digital bank, Tide has been around since 2015. Unlike Starling, it only offers business accounts. It automatically tags and categorises your spending, allows you to manage expenses by uploading receipts, which are then matched to transactions, and send and manage invoices."
Do you need a business bank account for a limited company?
If you’ve set up as a limited company and you’ve registered with Companies House, you will be required to open a business bank account if you intend to deposit funds, and make and receive payments (which is going to be the case for most).
A limited company is a type of business structure where the company has a legal identity of its own, and the liability of the owners is limited to the capital that they have invested.
Limited companies are privately owned by one or more people, and they must be registered with Companies House, pay corporation tax and file annual accounts.
Can you run a limited company from a personal bank account?
The short answer is no! As a limited company is a distinct legal entity, its finances must be kept in a separate account to your personal finances.
The situation is slightly different if you’re a sole trader – you can use your own personal current account to make and receive payments relating to your business, but only if your banking provider allows this type of usage. And if your bank sees a huge volume of transactions going through your personal current account, it may still request that you open a business account. Learn more about using your personal bank account for your business.
What are the other advantages of a business bank account?
There are a number of advantages to having a business account.
For a start, you’ll be able to keep the business finances separate to your own, which will make them much easier to manage and monitor, especially when it comes to expense and tax reporting.
Many accounts also come with enhanced features, such as invoicing and expense tracking tools, or the ability to integrate with accounting software.
One thing to be aware of is that unlike most personal bank accounts in the UK, business accounts often come with a monthly fee and other transaction charges. This isn’t unusual, but the level of fees being charged will be one of the things for you to compare when selecting which business account to open.
How to choose a business bank account for a limited company
It’s important that you consider all of the features and fees that come with the various business accounts out there on the market, before deciding which one to apply for.
Here are some key questions that you should look into when researching business bank accounts:
Does the account come with a free trial period?
What is the monthly or annual account fee (after any free trial)?
What are the fees for transactions such as direct debits, international payments or ATM withdrawals?
Does the bank have a branch network, if you prefer to speak to staff in person?
What features does the account have e.g. invoicing or expense monitoring tools?
Does the account offer integration with accounting software such as Quickbooks, Xero and FreeAgent?
How quickly can I open the account?
Will I be able to open the account if I have a bad credit score?
How to open a business bank account for a limited company
Once you’ve researched and chosen which business account you’d like to go for, you’ll need to apply to that banking provider to open it. Many applications can now be done online or through a mobile app (especially given the growing number of digital-only accounts), although some banks with a branch network might ask you to visit in person.
Every business bank account will have a slightly different application process, but here is a general list of information and documents that you should have to hand:
Companies House registration number for your business
Your business name and address
Your own personal details and contact information
A form of ID
Proof of address
Estimated business turnover
Personal bank or financial statements
Most business bank account providers will also carry out some kind of credit check on you, although there are a few that will let you open an account without one. For more information on opening a business account without a credit check, check out our guide to opening a business account with a bad credit score.
How to open a business bank account as a non-UK resident
If you’re not resident in the UK it may still be possible to open a business bank account here. We have gone further into this topic with a dedicated guide.
The traditional high street banks are likely to offer you a type of international bank account, though you will still need to provide all of your ID and address information (for your current country of residence).
The other option is to go with one of the digital-only accounts which can be opened online or through a mobile app – some of these banking providers (not all) won’t ask you for proof of address or conduct any credit checks.
Bottom line
It’s essential to have a business account if you’re a limited company as it’s a legal requirement. It will also give you lots of useful tools to help you run your business. There are plenty of options, ranging from accounts from the traditional big banks to newer app-based accounts, so you’ll be able to find something to suit your business. Just make sure you look at the costs and features carefully to work out which ones would be best for your needs.
Frequently asked questions
As a limited company is a distinct legal entity to you as an individual, its finances must be kept in a separate account to your personal finances. If your limited company plans to accept payments from customers or other third parties, you should open a business bank account for the company, as opposed to another personal current account.
Yes. There is no rule that says a limited company can only have one business account at any given time. Depending on the kind of work your business does, there may be perfectly sensible reasons to have more than one business bank account.
Yes, you can use the service to switch account if you’re a small business with fewer than 50 employees and a turnover of less than £6.5m a year as long as the bank you’re switching from and to are signed up.
Yes, as the company is a distinct legal entity the account must be in the name of the company not individual directors or shareholders.
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To make sure you get accurate and helpful information, this guide has been reviewed by Cathy Hudson, a member of Finder's Editorial Review Board.
Michelle Stevens is a deputy editor at Finder, specialising in banking, credit, loans and mortgages. She has a journalism degree from the University of Sheffield and has been a journalist for 15 years, writing on topics including fintech, payment systems and retail. In her spare time, Michelle likes to travel, explore new foodie experiences and attempt to improve her own culinary skills. See full bio
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By switching your business bank account, you may be able to reduce your monthly fees or take advantage of different features like smart bookkeeping tools.
Considering a Revolut Business account? We take a closer look at the features and price plans available with these digital-only accounts.
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