Formalities
Opening a bank account
At least one bank account is essential for any business, however small. Don’t be tempted to run your business through your own personal bank account “until it gets off the ground”. That is a recipe for disaster. Open a separate bank account for your business as soon as you begin to trade.
A limited company needs to pass a resolution of the Board of Directors to open a bank account. The steps are:
- Ask your bank for a bank mandate form, which authorises the bank to carry out the instructions of the directors regarding the operation of the account
- Decide what instructions you want to give the bank regarding who is authorised to sign cheques on behalf of the company, and how often you want to receive statements
- Hold a meeting of the directors of the company
- Propose the resolution at the meeting in the form required by the bank – see the mandate form for the wording – and have it adopted by the directors
- Complete the mandate form
- Get sample signatures from each of the people authorised to sign cheques on behalf of the company
- Return the mandate form and sample signatures to your bank
- Give the bank a copy of your company’s Memorandum and Articles of Association. These will be kept for bank's files
- Show the original of the company’s Certificate of Incorporation. A copy of this will be taken for the bank's files
- Bring some money to lodge to the new account.
Depending on the bank and branch, it may take a few days or a few weeks to clear all the paperwork associated with opening your company’s bank account. Allow for this in your planning.
If you need immediate access to the money you are lodging, your bank can usually arrange for temporary cheques to be made available while a chequebook is being printed.
Now move on to consider the other aspects of formalities:
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