Opening a business bank account for an Ohio LLC

Why does an Ohio LLC need its own business bank account?

Your LLC is a separate legal person from you. Its money should sit in an account in its name, not yours. That separation is what lets you show a creditor, the IRS, or a court that the LLC's business is the LLC's and not your personal affairs.

• Liability. Ohio protects members from LLC debts solely because of membership (ORC 1706.26). Mixing personal and business money hands a creditor an argument that the LLC and you are really one and the same.
• Taxes. Clean business records make the return easier and any IRS question easier to answer.
• Contracts and payments. Customers paying the LLC should pay the LLC, not you personally.
• Lending. A bank looking at a loan or line of credit will want to see the LLC's own deposit history.

Open the account as soon as the LLC is formed and has a tax ID, before the first customer payment arrives. If a customer pays before the account exists, deposit the check once the account is open rather than cashing it personally, and note the date it came in. Our guide on how to start an LLC in Ohio shows where the bank account fits in the full sequence.

What documents do Ohio banks ask for to open an LLC account?

There is no single statewide list. Each bank sets its own account-opening policy under federal rules, and requirements differ between a national bank, a community bank, a credit union, and an online bank. What most of them typically ask for:

Call the branch or check the bank's website before you go. Ask whether every signer must be present, whether they accept digital copies, and whether they need a certified copy of anything. A ten-minute call saves a second trip.

A typical order of steps

1. File the articles and save the filed copy the state returns.
2. Get the EIN and save the IRS confirmation as a PDF.
3. Sign a written operating agreement, and a bank resolution if your bank asks for one.
4. Collect name, date of birth, address, and ID details for every 25 percent owner and the person who controls the LLC.
5. Call the bank, confirm its list, and book an appointment if the account cannot be opened online.
6. Make the opening deposit from your own funds and record it as a capital contribution.

That last step matters more than it looks. The first money into the account is usually your money, and your books should show it as a contribution to the LLC, not as income the LLC earned.

The EIN letter: what banks want and how to replace it

Most banks want the LLC's federal Employer Identification Number and proof of it. The proof is the IRS confirmation notice, usually the CP 575, issued when the EIN is assigned. Save it as a PDF the day you get it.

A single-member LLC with no employees is not always required to have an EIN. The IRS says such an LLC generally uses the owner's SSN or EIN for income tax, but it can apply for its own EIN if it needs one to open a bank account. Many banks ask for it, and it keeps your SSN off the LLC's paperwork.

If you lost the EIN letter

The IRS does not reissue the original CP 575. Instead, call the IRS business and specialty tax line and request Letter 147C, which confirms the EIN previously assigned. The IRS also says users of its online Business Tax Account can download a digital CP 575 verification notice, which can substitute for the original notice and for Letter 147C. Our EIN filing service uploads the IRS confirmation to your portal, so it is there when the bank asks.

Operating agreement and proof of who can sign

A bank needs to know who has authority to open the account and move money. For an LLC, that answer lives in the operating agreement. ORC 1706.01(R) defines an operating agreement as any valid agreement of the members, written or oral, or a written declaration of a sole member. An oral agreement is legal, but you cannot hand it to a banker. Put it in writing before you go.

• Single-member LLCs: a short written declaration of the sole member, or a full operating agreement, naming you as the person with authority.
• Multi-member LLCs: the operating agreement plus, at many banks, a written resolution or certificate signed by the members stating who may open accounts and sign checks.
• Manager-managed LLCs: the agreement should show who the managers are, since they usually sign.

Some banks have their own resolution form and will ask you to sign it at the branch. The details of what belongs in the agreement itself are in our Ohio LLC operating agreement guide.

An optional state filing: the statement of authority

Under ORC 1706.19, an Ohio LLC may file a statement of authority with the Secretary of State naming who may act for it. It is optional, and banks do not usually require it. It can help a larger LLC that deals with many outside parties, since it is conclusive in favor of someone who relies on it in good faith.

The beneficial ownership questions at account opening

Every LLC opening an account will be asked about its owners. Federal rule 31 CFR 1010.230 requires banks to identify and verify the beneficial owners of a legal entity customer when a new account is opened, with limited exceptions. The rule defines two groups:

• Ownership: each individual who directly or indirectly owns 25 percent or more of the equity interests. Up to four people can fall in this group.
• Control: one individual with significant responsibility to control, manage, or direct the company, such as a managing member, president, or similar role.

The same person can be in both groups. A single-member LLC typically lists the owner once, as both. The bank collects each person's name, date of birth, address, and identification number, and verifies identity under its own procedures. Bring ID details for any 25 percent owner who is not coming to the branch.

Owners are sometimes surprised by how much the bank asks, especially when one LLC owns another. If a holding company owns 25 percent or more of your LLC, the bank is looking for the individuals behind that holding company, not the company itself. Map the ownership chain on one page before your appointment: each entity, each owner, and each percentage. It makes the conversation shorter and keeps the certification accurate.

This certification happens at the bank and is separate from any report filed with FinCEN. For the federal reporting side, see our guide to beneficial ownership reporting for Ohio LLCs.

When a bank asks for a certificate of good standing

A brand-new LLC usually does not need one, because the articles were filed days ago. Banks tend to ask when the LLC has existed for a while, when the account is part of a loan, or when the bank is outside Ohio and wants a current state-issued document.

Ohio's statute for LLCs, ORC 1706.175, calls it a certificate of full force and effect; the fee schedule and most people call it a certificate of good standing. The state fee is $5. Our certificate of good standing service orders it and puts it in your portal. Ohio LLCs file no annual report, so most LLCs have no yearly filing to catch up on first; what matters is that the state has not cancelled the LLC, for example for failing to keep a statutory agent (ORC 1706.09(L)).

Which address goes on the LLC's bank account?

Banks generally want the LLC's physical business address, where it actually operates, plus a mailing address if different. That is not necessarily the same as the statutory agent address on the state record.

Your Ohio statutory agent's address is where lawsuits and official notices are served. If you use a service, the state record shows the agent's office instead of your home. Our Ohio statutory agent service is $49 a year from our Litchfield office. That address is for legal papers; do not list it as your operating address with the bank unless the bank tells you it accepts that. Our guide to the principal office vs. statutory agent address explains the difference.

How to keep your LLC's money separate after the account is open

Opening the account is the easy part. The habits after it decide whether the LLC's records hold up.

• Deposit every business payment into the LLC account, including cash and payment app transfers.
• Pay business expenses only from the LLC account or an LLC card.
• Pay yourself by recorded owner draws or distributions, not by paying personal bills from the business account.
• If you cover a business cost personally, document it as a loan or contribution and reimburse it from the LLC account with a note.
• Use the LLC's exact legal name on invoices, contracts, and checks.
• Reconcile the account monthly, or have your bookkeeper do it.
• Keep the articles, EIN letter, operating agreement, and bank resolution together where any member can find them.

For a multi-member LLC, also set rules for who can approve payments over a certain amount, and write them into the operating agreement or a member resolution. Disputes between members often start with an unexpected withdrawal.

Questions to ask when choosing a bank for your Ohio LLC

The cheapest account on paper is not always the cheapest once your business is running through it. Before you open, ask each bank or credit union you are considering:

• What is the monthly fee, and what balance or activity waives it?
• How many transactions, deposits, or cash deposits are included each month before fees start?
• Can more than one person have online access, and can access be limited by role?
• Does it offer card processing, and does it work with your accounting software?
• Is there a branch near you, if you deposit cash or checks often?
• How do wire transfers, ACH payments, and mobile deposits work, and what do they cost?
• How does its deposit insurance apply to an LLC account?

Businesses that handle a lot of cash, such as restaurants, salons, and contractors paid on site, should weigh branch access and cash deposit fees heavily. A business paid mostly by card or ACH can often do fine with an online bank. Whichever you choose, use one primary operating account rather than several, so the LLC's money is easy to follow.

Updating the bank account when the LLC changes

The bank's records go stale when the LLC changes and nobody tells the bank. Plan to update the account when:

• A member joins or leaves, or ownership percentages cross 25 percent. See Ohio LLC member changes.
• The LLC changes its legal name by amendment. Bring the filed amendment.
• The LLC registers or drops a trade name used on the account.
• Signers change, including a manager who leaves.
• The business address changes.

Remove a departing signer's authority and cards right away. The bank will honor whoever is on file until the LLC tells it otherwise.