Step 6: Open a Bank Account

Use your LLC's EIN and other necessary documentation to open a separate business bank account and get a Voided Check or a Bank Letter confirming account ownership. Keeping personal and business finances separate is essential for liability protection and financial organization.


3/19/20242 min read

black and silver door knob
black and silver door knob

Opening a separate business bank account for your real estate investing LLC is a critical step towards maintaining financial organization and safeguarding against personal liability. Here's how to proceed:

1. Gather Necessary Documentation:

- Before heading to the bank, ensure you have all the required documentation in hand. This typically includes your LLC's Articles of Organization, Operating Agreement, Employer Identification Number (EIN) issued by the IRS, and any additional identification documents as per the bank's requirements.

2. Choose a Suitable Bank:

- Research various financial institutions to find one that offers business banking services tailored to your needs. Consider factors such as account fees, transaction limits, online banking capabilities, and branch accessibility.

3. Schedule an Appointment:

- Call your chosen bank to schedule an appointment to open a business account. This allows you to allocate sufficient time for the process and ensures that a bank representative is available to assist you.

4. Visit the Bank:

- On the scheduled day, visit the bank branch with all required documentation. Inform the bank representative that you're looking to open a business account for your LLC and provide them with the necessary paperwork.

5. Complete the Application:

- Fill out the required account application forms provided by the bank. These forms typically request information about your LLC, its members, business activities, and the desired account features.

6. Provide Your LLC's EIN:

- Present your LLC's EIN issued by the IRS as part of the account opening process. This unique identifier is essential for tax reporting purposes and helps the bank distinguish your business from personal accounts.

7. Obtain a Voided Check or Bank Letter:

- Once the account is opened, request a voided check or a bank letter confirming the account's ownership and details. This documentation serves as proof of account ownership and is often required for various financial transactions, including setting up direct deposit or making electronic payments.

8. Maintain Separation of Finances:

- Use your LLC's business bank account exclusively for real estate investment-related transactions. Avoid commingling personal funds with business funds to preserve the limited liability protection afforded by the LLC structure and to simplify financial record-keeping.

By following these steps and keeping personal and business finances separate, you not only enhance liability protection but also streamline financial management, making it easier to track expenses, monitor cash flow, and prepare tax filings for your real estate investing activities.