Do You Need an LLC to Open a Business Bank Account?

You’ve got a logo, a service to offer, and maybe even your first paying client. Now you’re ready to separate your business finances from your personal checking account. The logical next step? Opening a business bank account. But here’s the question that trips up a lot of new entrepreneurs: do you need to form an LLC first?

The answer is no—you don’t need an LLC to open a business bank account. But (and this is a big “but”), having an LLC—or any formal business structure—can make the process smoother, more legitimate, and more protective in the long run. Whether you’re running a full-fledged company or just getting your feet wet with a side hustle, the decision to formalize your business before heading to the bank can have lasting implications.

What Banks Require to Open a Business Account

Banks aren’t just handing out business accounts to anyone with a dream and a Venmo account. They need documentation—and exactly what they ask for depends on how your business is structured.

If You Have an LLC

You’ll typically need the following documents:

• Articles of Organization (proof your LLC is legally registered with the state)
• Operating Agreement (especially if there are multiple members)
• EIN (Employer Identification Number) from the IRS
• Business license (if required in your city or state)

Most banks view LLCs as “legitimate” business entities, so opening an account is generally straightforward—once you provide the proper paperwork.

If You’re a Sole Proprietor (No LLC)

Sole proprietors can also open business accounts, but the documentation differs:

• DBA certificate (“Doing Business As” name, if you’re not using your legal name)
• EIN or Social Security Number
• Business license or other permits (if required locally)

Banks will often allow you to open a business account as a sole proprietor, but they’ll want to see that you’re actively operating a business—even if it’s just you doing freelance work out of your living room.

Why Opening a Business Account Matters (LLC or Not)

Mixing business and personal finances is a recipe for confusion, stress, and possible tax headaches. Even if you’re earning a few hundred bucks a month on the side, a separate business account offers:

• Clean bookkeeping — Makes tax season way easier and improves financial clarity.
• Professional image — Clients can make checks or payments to your business, not you personally.
• Credibility with lenders — Many banks and lenders won’t take you seriously without a separate business account.
• Legal protection — If you do have an LLC, keeping business finances separate helps maintain your liability shield.

In short: if you’re making money under a business name, you need a business bank account—LLC or not.

Pros and Cons of Opening an Account Before Forming an LLC

If you’re early in your journey, you might be wondering if it’s better to get the bank account rolling now or wait until your LLC paperwork is complete. Here’s a quick breakdown:

Pros of Opening an Account Now (Without an LLC)

• You can get started right away and begin separating finances.
• Great for freelancers and gig workers who may not need formal structure yet.
• Some banks offer basic business accounts with minimal documentation.

Cons of Opening an Account Now

• If you later form an LLC, you may need to close and reopen the account under the new entity name.
• Operating without liability protection could put personal assets at risk.
• May not appear as “legitimate” to some vendors, lenders, or clients.

Pros of Waiting Until After You Form Your LLC

• You open the account under the correct legal name and structure from day one.
• Stronger liability separation and business credibility.
• Easier to align with business loans, credit cards, and merchant services later.

Cons of Waiting

• Delays getting fully operational while you wait for LLC approval (which can take days or weeks depending on your state).
• Tempting to mix personal and business finances in the meantime—always a bad move.

Bank Policies Vary—So Ask the Right Questions

Not all banks play by the same rules. Some are startup-friendly and will let you open an account with minimal documentation. Others are stricter, especially large national banks. Before choosing where to open your business account, ask:

• What documents do you require for an LLC vs. a sole proprietorship?
• Can I open an account while waiting for my EIN?
• Is there a monthly minimum balance or service fee?
• Do you offer online banking, invoicing, or bookkeeping tools?
• Can I upgrade my account later if my structure changes?

Local credit unions, online banks (like Bluevine or Novo), and newer fintech platforms often offer more flexibility for new entrepreneurs than traditional banks.

Should You Get an EIN Even If You Don’t Have an LLC?

Yes! Even sole proprietors without an LLC can (and often should) get an EIN. It helps you:

• Avoid using your Social Security number on invoices or account forms
• Appear more legitimate to banks and clients
• Prepare for hiring or business growth in the future

Best of all, it’s free and easy to apply online at the IRS website. No reason not to get one.

How Your Business Structure Affects the Account Name

The legal name on your bank account must match your business documentation. Here’s how it plays out:

• Sole Proprietor: Your account name might be “Jane Doe DBA Spark Copywriting”
• LLC: Your account will be under “Spark Copywriting LLC”

If you’re planning to brand your business name and accept payments under that identity, forming an LLC first can streamline everything—logos, invoices, tax forms, and your bank account.

LLC Not Required, But Often Recommended

You don’t need an LLC to open a business bank account—but forming one early can make your life easier in the long run. Not only does it provide legal protection and legitimacy, but it also creates a clear, professional boundary between your personal and business finances.

If you’re just testing an idea or side hustle, you can open a business account as a sole proprietor. But once you’re confident that your business is here to stay—or you’re earning enough that legal protection matters—it’s wise to consider forming an LLC and getting everything aligned from name to EIN to bank account.

At the end of the day, it’s not just about paperwork. It’s about setting up your business for long-term success, stability, and professionalism. Whether you’re banking solo or building a full team, a clean financial foundation starts with the right account—and the right structure to support it.