Opening a corporate account or business account is very important for entrepreneurs or business owners seeking means to position their businesses for growth.
Lots of people have lost opportunities such as grant opportunities, contract deals and lots more because they don’t have a functional bank account for their business.
Some customers frown at making transfers to an individual account instead of a business account bearing the name of the business. Those who have lost a potential customer after all negotiations have been completed and the remaining payment sometimes doesn’t know that such a customer lost interest due to the provision of an individual account instead of a corporate account bearing the name of the business.
Opening a bank account for a business has another advantage of separating personal money from business money. It brings a level of checks and balances as business money will be treated as a cash asset for the business which decreases the level of spending for personal needs using business funds or money. It doesn’t solve the drawing of money from business account for personal use but to some extent, it shows the movement of the funds which will help stakeholders to ascertain the business performance and management of finances.
It is not difficult to open a corporate bank account in Nigeria if the business owner meets the requirements. The first step to opening a business account or corporate account in Nigeria starts with registering the business name or company with the Corporate Affairs Commission (CAC).
There are different requirements to open a business account for a business name and company( Limited Liability Company or Public Liability Company).
For a business name which is usually a sole proprietorship type of business, the business owner will first register the business name with the Corporate Affairs Commission (CAC). It is a government agency that regulates and carries out the responsibility of registering businesses in Nigeria. When the registration is successful, CAC issues a certificate bearing the name of the business, listed products or services the business is registered to do, date of registration, address of the business and another document showing the name of the business owner or proprietor alongside other details of the business owner. When it is done, the business owner will visit the Federal Inland Revenue Service (FIRS) to obtain a Tax Identification Number (TIN). Sometimes the CAC certificate can come with TIN but if it doesn’t contain it, the business owner will need to approach the FIRS to obtain a Tax Identification Number before proceeding to any commercial bank in Nigeria to open a bank account for the business.
There are many commercial banks in Nigeria and the business owner will choose the preferred bank considering prompt services, availability and nearness. Things have been simplified with the use of ATM and Mobile banking and the business owner need not worry about distances any longer. Corporate or business accounts can also be opened online without necessarily visiting the physical branch of the preferred commercial bank.
With the CAC documents and TIN, the business owner can now proceed to the commercial bank and go straight to the marketing section of the bank to request for business account opening form. The business owner will fill out the form which requires the business name, date of registration, Business Number (BN), phone number, email address, passport photograph means of identification and references. The marketers in the bank will guide the business owner accordingly to fill out the form in case of difficulty while filling the provided forms. The business owner should also know about legal fee charges that the bank will request or debit after the successful bank account opening. When the registration is done and the business now has a bank account number, the business owner can request for ATM card, online mobile banking setup and other necessary things that are tailored to individual needs for business success. It is important to note that some bank accounts even after successful registration will require SCUML certificate from the Economic and Financial Crime Commission (EFCC) if such business performs activities that require monitoring in the fight against money laundering and financial crime.
For registered company, it has different requirements to open a corporate bank account number.
CAC documents documents bearing the certificate of incorporation, memorandum or business activities, articles of association, directors and shareholders particulars bearing allotted shares. Tax Identification Number (TIN) is also required. The company will need to produce Seal to seal documents where necessary. The company will need to write a letter to the bank requesting to open a bank account in the named commercial bank after shareholders and directors meeting. The letter will also introduce the signatory or signatories to the company bank account when successfully opened. One of the directors can serve as the sole signatory of the account depending on the management and shareholders’ agreement. The signatories to the account referred to as mandate to the account will provide their bank verification number, means of identification and other requirements. Some banks will also request for bank verification number (BVN) of the directors and their means of identification. It may be their way of properly knowing your customer (kyc). A reference form will be filled too and the form will be submitted for the account opening. When the company account is opened, the bank will charge or deduct legal fees. Companies that fall into the categories requiring a SCUML certificate or number from EFCC will need to obtain it and submit it for the smooth running of the corporate account. Companies can also request for ATM card, cheque book and online mobile banking when the bank account has been opened successfully.