How to manage a business bank account with multiple directors

If you run a limited company with multiple directors or a partnership, it’s important to arrange your finances so that everyone has the correct level of access.

Depending on the set-up of your company and the bank you choose, this could mean opening:

• A business joint account

• A business partnership account

• A standard business banking account that allows you to add additional users

What is a joint account for a business?

A joint business account works just like a joint personal account in that it enables you to have multiple signatories, each with the same rights to deposit and withdraw money.

Depending on which bank you choose, a joint business account offers similar features to an everyday bank account, such as overdrafts, online banking, FSCS protection and even access to savings accounts.

What is a partnership business account?

This type of bank account is specifically aimed at limited liability partnerships. Despite having a different name, they work in much the same way as a business joint account.

Do I need a joint account for my businesses?

Not all businesses have joint accounts. It’s perfectly possible to run a company with a standard business account where just one person, such as the managing director, has access. You can even set up some business accounts to give limited access to other members of the company. This could include other directors or even employees.

However, a joint account does have clear benefits, including allowing you to share the load of managing the business’s finances. It also ensures that all the directors know the company’s financial position.

It’s worth emphasising that all signatories to a business joint account can withdraw money, which could present a financial risk to your company. If this is a concern, you can find business accounts that require multiple permissions to withdraw cash, which can help protect company finances.

Some business joint accounts also require each director’s authorisation to close or switch an account. 

Another important thing to note is that a joint account links you financially to your business partners, which could impact your credit rating.

If you do decide to set up a business bank account with multiple signatories, you need to make sure that everyone has clearly defined roles and responsibilities. Decide who will act as the main administrator for the account, who is allowed to withdraw funds or make transfers, and what the process will be if the business closes or a director resigns.

What to consider when choosing a bank account for multiple directors

Each bank offers its own unique perks and features for joint business accounts. Things to consider include:

• Fees: Some banks charge monthly fees for maintaining business accounts, while others are free

• Cards: Some banks charge per card issued

• Number of directors or partners: Some banks limit the number of directors who can access the business bank account

• Integration: If you have existing accountancy software, try to find a business bank account that connects to it seamlessly

• Access for third parties: This could be useful if you want an external agent, such as an accountant, to have access

• Foreign transactions: If you operate internationally, review the account’s fees on foreign transactions and its exchange rates. Some business banks might charge a small fee if a client in another country pays you.

• Overdrafts and loans: Some banks might give you access to a business overdraft or small business loans, which can help you manage your cash flow

• Limitations: Check whether you can give people, such as employees, limited access

• Convenience: Check customer service ratings and helpline operating times. You should also investigate whether multiple people can access online and mobile banking services

• Savings: If your business has money left after everyday operating costs, check what savings accounts and rates the bank offers.

How to set up a joint business account

If you’re setting up a joint business account, you need to complete various ID checks and provide the right paperwork. 

Typically, each director needs to supply:

• An ID document, such as a passport, driving licence or national identity photocard

• Proof of address, such as a driving licence, bank or credit card statement, mortgage statement, council tax bill, or utility bill

If the business is a limited company, you also need to provide the following:

• Certificate of incorporation

• Companies House registration documents

• Registration forms for any recently appointed directors or company secretaries

Partnerships need to provide, where applicable:

• Partnership agreement

• Contract of co-partners

• Certificate of formation

• Evidence of partnership trading address

Most banks also require additional information, such as your registered business address, main business activity, customer breakdown, expected turnover and the amount of money you expect to pay into the account.

Can I add a new director to business banking?

You can usually add new directors to your business account, but the process and number depend on the individual bank’s rules.