Opening a corporate bank account is an important part of owning a corporation. It is necessary both at the beginning of the company’s business operations as well as in the long run. Every business owner ought to open a corporate bank account for the purposes of depositing funds as well as paying the company’s bills. Ownership of a corporate bank account also allows a business owner to separate personal and business funds as far as tax and accounting matters are concerned. The separation of business and personal funds will also provide a company with a degree of liability protection provided by their legal entity.
Definition of a Corporate Bank Account
A corporate bank account is an account which primarily offers services for companies. In this way, a corporate bank account clearly differs from personal as well as investment bank accounts. For this reason, the regulations which are imposed upon corporate bank accounts differ from those imposed upon other bank accounts. There are several advantages associated with the opening of a corporate account. Many banks offer financial advantages to companies which open a corporate account in such banks. Another advantage associated with a corporate bank account lies in the fact that a bank and account can be selected based on the business needs of the company which opens the account because each bank provides different services. Therefore, it is critical to ensure that the bank which is selected will address all of the company owner’s business needs.
Opening a Corporate Bank Account in Hong Kong
Any business owner who opens a corporate bank account in Hong Kong must first choose a bank in which the account will be opened. It is advisable for such an owner to contact banks in the nearby area of the business or view their websites to learn more about the services provided by such banks. Other business owners should also be consulted with regard to their experiences with particular banks.
It is also important to compile and provide all required documents before opening the bank account. Among the information which will be required to be supplied usually include the name of the business, the business’s address and phone number, and the personal details of every person who will be granted the authority to access the corporate bank account. After the initial deposit is made, the setup of the corporate bank account will have been completed.
Corporate Bank Account Opening Requirements in Hong Kong
Banks in Hong Kong require all companies based there to submit certain documents before opening a corporate bank account. The documents required for the opening of a corporate bank account in Hong Kong include a completed bank account opening form which has been signed by authorized signatories as well as an extract of the board resolution which provides official approval for the opening of the corporate bank account. Three certified true copies are also required. These copies are to be of the company’s Certificate of Incorporation, (issued by the Companies Registry), the company’s Business Registration Certificate, (issued by the Inland Revenue Department), and the company’s Articles of Association. A director’s declaration which specifies the personal details of directors and principal shareholders must also be provided. Such details can be supplied through copies of Hong Kong identity cards or passport, residential proof, and former name or alias proof. The signatures of all authorized signatories must also be provided, as must official evidence of business activities such as audited financial statements or an official business plan. Corporate shareholders of the company are also to submit a certified copy of an organizational chart detailing the percentage of shareholdings held by each individual shareholder as well as the identity of ultimate beneficial owners of the company. All ultimate beneficiaries which are trusts are required to submit a certified copy of the trust deed or declaration of trust which contains the personal details of the trustees, settlers, and beneficiaries. All copies of submitted documents submitted must be certified by one of the following: a certified public accountant, banker, lawyer, or company secretary.
Most banks in Hong Kong also require an initial minimum deposit before the opening of the bank account. Offshore companies which open a corporate bank account in Hong Kong will need to submit a Certificate of Incumbency as well as a Certificate of Good Standing in addition to the other required documents.
Banks in Hong Kong adhere to due diligence procedures and therefore require the account signatories, principal directors, and shareholders to be in Hong Kong when the corporate bank account is opened. However, some banks may permit such an account to be opened without the need for such people to go to Hong Kong. In such a case, the documents are to be signed at one of the bank’s foreign branches in front of a reputable witness.
Why Corporate Bank Accounts Are Important
One important reason why corporate bank accounts are important is due to the fact that they provide a level of personal liability protection. Such protection will only come about if one’s personal and business finances are kept separate. The ownership of a corporate bank account will ensure that such is true. The separation of business and personal finances will also aid in the management of cash outflows and inflows.
A corporate bank account not only grants personal liability protection but also supplies a degree of professionalism. It is also much easier for a company’s tax records and business activities to be monitored if a corporate bank account is owned. By analyzing the details and transaction history of a corporate bank account, a company owner will be able to determine which expenses ought to be reduced, which areas require additional investment, from where the majority of the company’s revenue is derived, and almost any other important financial matter.
As a company expands, the ownership and maintenance of its corporate bank account will make it much easier to allocate a specific amount of money towards the salaries of the company’s employees. A corporate bank account may also be used in order to enter joint ventures with other business owners or to make mass payments. A corporate bank account will ensure that the company’s transactions are transparent and genuine at all times.
A company which has a corporate bank account might sometimes be able to use this account to gain access to loans. Such is the case because before a loan is granted, lenders must believe that the business is being run to the best of the owner’s capabilities. Through the corporate bank account, they will be more able to monitor how the business has been run before they decide to grant a loan to the business owner.
Another reason why corporate bank accounts are important lies in the fact that such an account is able to keep the company’s accounting transactions transparent for the purpose of external auditing. In this way, a company owner will be able to determine the exact amount of tax which is to be paid.
Advantages Provided Through Ownership of a Hong Kong Corporate Bank Account
Having a corporate banking account in a Hong Kong bank provides a business owner with many benefits. For one thing, a corporate bank account will ensure that a business owner in Hong Kong will have a stable reserve of money. Therefore, in the event of any external financial troubles in the economy, the business will not be faced with internal financial difficulties.
Another advantage of having a corporate banking account in Hong Kong is the ability to access professional bankers who will be able to assist in the management of the company’s finances. Hong Kong’s bankers are some of the most well-reputed in the world. Therefore, anyone who owns a corporate bank account there will benefit from the outstanding services offered by the bankers of Hong Kong.
Any company in Hong Kong may have as many corporate bank accounts as are deemed necessary. Company owners who are able to adeptly manage multiple corporate bank accounts at the same time will be able to increase the company’s level of organization, security, and financial stability. The number of corporate bank accounts which ought to be owned by any Hong Kong company depends on the company’s current financial circumstances and goals. This optimal number of corporate bank accounts may change with the passing of time.
Companies based in Hong Kong can choose from any of several international and local banks for the opening of a corporate bank account in Hong Kong. Banks in Hong Kong provide access to cash management facilities, Internet banking to help keep track of money movement, trade financing, and loans of varying durations. All major banks in Hong Kong, whether local or international, have methods in place which are able to address any of these needs.