Easy business banking for limited companies

Setting up a limited company can help to reduce your tax bill and protect your personal finances against any claims made against the company, such as legal expenses or business debts.

It changes the types of tax you have to pay – for example, you can draw a salary from the company while potentially paying less income tax overall, whereas the company may need to pay corporation tax on its profits.

This balance between the different taxes means that sole traders earning relatively little may find it more tax-efficient to remain a sole trader than to register a company – but equally, you may choose to register as a limited company anyway, to protect your finances and exposure to legal claims.

Setting up a limited company

There are a few things you need in order to set up a limited company:

  • One or more company directors
  • A company name that is not too similar to any already in use
  • A trading address
  • A SIC code – this tells Companies House what category your business falls into
  • Details of your company’s shares and at least one shareholder

If you have all of this information and anything else you need, then you can register online usually within 24 hours, for a small fee – this is cheaper and faster than registering by post.

You will then receive a certificate of incorporation. This is confirmation of your company’s legal status, but also of your formation date and company number, which you can include on letterheads and other official business documents.

You have three months from the date you start trading – the date you buy or sell anything through your business, rent premises or hire any employees – to register with HM Revenue & Customs to pay corporation tax, so don’t forget to do this in order to avoid a penalty for being late.

Business banking for limited companies

As a sole trader it may be possible to run your professional finances through your personal account, but for a limited company it’s sensible to keep everything separate in a dedicated business account.

Business bank accounts are available from the major high street banks, although they may ask for a lot of paperwork to support your application.

Depending on the services on offer to you, you might be asked to prove your trading history, show that you have a certain value of upcoming orders already confirmed, or show the bank your business plan for a certain period of the future.

If you don’t have any of this information, for example because you have registered as a limited company for tax purposes more than as a business planning decision, you might find it difficult to open a business bank account.

Arro – the alternative to banking for limited companies

An Arro Business Account gives you an alternative to traditional banking for limited companies, with guaranteed acceptance (subject to our Fair Fit criteria).

We don’t ask to see any trade secrets, business plans or sensitive order book information; your company financials don’t matter to us as long as you keep your account balance in the black.

All we need is your name, date of birth and UK trading address, along with your company name and some contact details so we can send you your account number and Business MasterCard® details once everything is up and running.

Crucially, you don’t need to be a well established brand or have years of trading history – we even accept applications from sole traders, so if you’re not certain about registering a limited company just yet, you can still open an Arro Business Account as an individual in the meantime.

Fair and transparent business account fees

Finally, we are always honest and upfront about any fees for using your Arro Business Account – and you can check the full list of fees at any time so you know if you will be charged for a transaction.

There’s no charge for opening a new Arro Business Account or for deposits into your account, whether they are made by you or by customers paying electronically to your sort code and account number.

Your first ten ATM withdrawals, first ten online transfers or Faster Payments, and all new Direct Debits are free of charge too, so a lot of your business transactions could cost nothing in account fees.

With absolutely no credit checks or black marks on your credit history, and guaranteed approval for all eligible applicants in as little as three minutes, the Arro Business Account is there for you from day one, for as long as you need it.