Your company's first name might be different from the one you ultimately settle on. Business names frequently change as companies develop and grow. You may be thinking, "Can I change the name on my business bank account?" if you have a separate bank account for your company.
The short answer is "yes," but there's more to it than simply changing the name of your business in the online banking interface.
Whether you want to keep the same corporate entity structure or are considering a change will determine how quickly and easily you may alter the name on your company's bank accounts. You may need to switch to a different type of company checking account.
When To Keep Your Business Bank Account Name
Can I switch the name on my company's bank account? If you're not switching up your company's legal structure, you may not have to make any adjustments.
Using a DBA to Change Your Company's Name
Adding a "DBA," or "doing business as," to the end of a company name is a common practice for entrepreneurs. It's very usual for a company to use a different name for its external operations than when it was incorporated or filed articles of business.
A change in the business name, such as "Jen's Woodworking LLC" to "Master Carpentry by Jen", is an example of a DBA. Your DBA may help you communicate your company's value, set you apart from similar businesses, or give your brand a facelift.
Change Business Bank Account Name Without Opening New Account
Nothing about your legal company entity changes when you file for a DBA, so you won't have to update your small business tax records, licenses, or anything else significant.
The name of your company's bank account is optional to be changed in most cases. Regardless, you should check with your bank to learn its specific regulations. Adding a DBA name to an account at many financial institutions is straightforward.
For new financial transactions to include your name, you may need to take further measures, such as changing your name on checks before sending them out.
Why And How To Change Your Company's Bank Account Name
In contrast, if you want to alter your company's structure and business name, you'll have to go through a different process than if you were only adding a DBA.
Transforming Your Company's Identity and Name
Adding a DBA is one of many consequences of reorganizing your company's structure. Your company's tax status will shift, and you'll need to register anew with the state, submitting new articles of incorporation and any other paperwork necessary by law.
Changing from a sole proprietorship to an LLC or partnership typically necessitates a company rebranding. A fresh set of documents must be filed (however, a name may be transferred to the new LLC provided a DBA is also pointed at the same time).
Changing Your Business Name and Entity
Remember that changing your company's legal structure and name affects more than simply your bank account while making this decision. Tax filing procedures vary depending on the legal form of your business, so it's essential to notify the IRS of any modifications (even if they're as simple as a name change). A new Employer Identification Number (EIN) application is in need (employer identification number).
Change Your Business Bank Account Name
Keep these points in mind if you need to create a new bank account. The first thing you need to do is make sure your initial bank account is closed. You can pay inactivity or minimum balance penalties, for example.
Next, you should change over any automated payments, such as direct deposits or ACH transfers that are being made from your account. Reviewing past accounting transactions is a practical approach to keeping track of the money coming in and going out of your firm.
Business Bank Account Opening
While creating a new business bank account to reflect your company's new name may seem like a hassle, it presents a tremendous opportunity for your company. When creating a business checking account, you may go through your current bank's options or choose a new one.
It's essential to take this step because switching legal forms for your organization indicates some major shifts behind the scenes. You may be altering the organization's structure since it's expanded to the point where more money and deposits will need to be handled than before.
