How to Open a Business Bank Account in California: Requirements and Fees
We found no California statute that requires a business to have a business bank account. You should still open one. A separate account keeps your records clean for income tax and sales tax reporting. Mixing personal and business money can weaken the liability protection an LLC or corporation provides, because a court may treat the business as an extension of you. Most banks also will not open an account for an entity without formation documents. If you are a sole proprietor operating under a trade name, you usually need a business account too, because checks typically have to show that name.
This guide is informational, not legal or tax advice. Confirm details with the agency or bank named, and talk to a qualified attorney or CPA before you make decisions about your entity, taxes, or records.
The Steps, in Order
- Form the entity and get the filed copy. An LLC files Articles of Organization (Form LLC-1) with the Secretary of State. A corporation files Articles of Incorporation. Check name availability on the Secretary of State business search. An LLC name must include an accepted designator such as LLC, and you can reserve a name for $10 for 60 days. The LLC-1 filing fee is $70 and the stock corporation filing fee is $100. Online filings through bizfile Online are normally processed within about 5 business days or less. Paper filings take 10 or more business days. Expedited options are $350 for 24-hour, $750 for same-day if received by 9:30 a.m., and $500 for 4-hour drop-off service (precleared). Keep the file-stamped copy, because banks ask for it.
- Get your EIN. Apply for an Employer Identification Number from the IRS at irs.gov. The application is free. Banks generally want the EIN confirmation letter for an LLC or corporation.
- File a fictitious business name statement if you need one. If the business operates under any name other than the owner's name or the entity's exact legal name, file a Fictitious Business Name Statement with the County Clerk-Recorder in the county of your principal place of business. If you have no place of business in California, file in Sacramento County. File before you open the account, and within 40 days of starting to do business under the name. The Secretary of State fictitious business names page explains the rules. Our DBA guide walks through the filing.
- Gather identification. Each person who will sign on the account needs a government-issued photo ID and a Social Security number or ITIN.
- Compare banks. Use the criteria in the comparison section below. Our best banks for small business in California comparison is a starting point, but check each bank's current terms yourself.
- Apply in person or online. Some banks let you start online and finish at a branch. Before you go in, ask whether the bank needs originals or certified copies of your formation documents.
- Fund the account. Make the opening deposit by a method the bank accepts. Ask for any minimum opening deposit in writing.
- Set up online and mobile banking. Add every authorized signer, set transfer approval limits if the bank offers them, and confirm you can download statements and check images.
Documents Banks Typically Request
Requirements differ by bank, so ask for the bank's list before you apply. The table below covers what most California banks request.
| Business type | Documents to bring |
|---|---|
| Sole proprietor using a trade name | Government ID, Social Security number or EIN, and the Fictitious Business Name Statement |
| LLC | Filed Articles of Organization, EIN confirmation letter, operating agreement (often requested, since California LLCs keep one as part of the records they must hold), and government ID for each signer |
| Corporation | Filed Articles of Incorporation, bylaws, board resolution naming the authorized signers, EIN confirmation letter, and government ID for each signer |
Some banks also ask for a local business tax registration, a seller's permit, or a certificate of status. Ask your bank which of these it wants. California has no general statewide business license, and the Secretary of State issues none. Most cities, however, charge a local business tax or registration certificate. Of 483 cities, 445 report revenue from one, and there is no common formula, so the answer depends on your city. Check with your city if you are unsure whether you owe one.
Banks also collect ownership and control information about the business under federal customer due diligence rules. Expect questions about who owns the business and who controls it, and have each owner's name and role ready.
What to Compare When Choosing a Bank
- Monthly maintenance fee and the balance or activity that waives it
- Free transactions each month and the per-item fee after that
- Cash deposit limits and any fees for cash deposits
- Wire and ACH fees
- ATM access and branch locations in your city
- Online tools, including bill pay, payroll, and mobile check deposit
- Accounting software integrations
- Lending products, if you may need a loan or line of credit later
Ask each bank for its current fee schedule in writing. Bank fees change often, so treat any number you find online, including in comparison guides, as something to verify before you rely on it. For that reason, this guide does not list bank fees.
Deposit Insurance and Online-Only Accounts
Deposits at FDIC-insured banks and NCUA-insured credit unions are covered up to $250,000 per depositor, per insured bank or credit union, per ownership category. Coverage applies to the institution that actually holds your money, not to the app you use to access it.
Many online-only business accounts are offered by financial technology companies that are not banks. In these arrangements, the funds are usually held at a partner bank. Ask which bank holds your money and whether that bank is FDIC-insured before you deposit anything.
Costs to Budget Before You Open the Account
The table below lists the state and county costs that come before the bank account. Bank fees are not included, for the reasons explained above.
| Item | Cost | Notes |
|---|---|---|
| LLC Articles of Organization (Form LLC-1) | $70 | Expedited service costs $350, $500, or $750 depending on speed and drop-off method |
| Stock corporation Articles of Incorporation | $100 | Newly incorporated corporations owe no $800 minimum tax in their first taxable year |
| LLC name reservation | $10 | Lasts 60 days and cannot be renewed for consecutive periods |
| Fictitious Business Name Statement | $10, plus $2 per additional name or owner (statutory fee) | County fees are higher, and newspaper publication is a separate cost |
| LLC Statement of Information (Form LLC-12) | $20 | Due within 90 days of filing, then every two years. A missed filing can bring a $250 penalty. |
| Corporation Statement of Information (Form SI-550) | $25 | Due within 90 days of filing, then every year |
| LLC minimum franchise tax (Franchise Tax Board) | $800 per year | Owed from the first year by LLCs organized or registered in 2024 through 2026. An LLC whose first taxable year begins in 2027 through 2029 pays $400 in year one under RTC 17941(g)(2). Confirm the first-year amount with the Franchise Tax Board. |
| LLC fee (Franchise Tax Board) | $900, $2,500, $6,000, or $11,790 | Applies once California-source total income reaches $250,000, $500,000, $1,000,000, or $5,000,000, respectively |
| Seller's permit (CDTFA) | Free | Needed if you sell taxable goods |
| Bank fees | Not listed here | Get each bank's current fee schedule in writing |
Common Mistakes to Avoid
- Opening the account before the EIN letter arrives. Confirm with the bank what it will accept while you wait for the letter.
- Using a trade name on checks without a fictitious business name statement. A fictitious business name statement is required when you operate under that name, and it must be filed within 40 days of starting.
- Paying personal bills from the business account. Commingling funds makes it harder to show that the entity is separate from you, and it complicates your tax records.
- Letting a Statement of Information lapse. The deadlines are short, and a missed LLC filing can lead to a $250 penalty.
After the Account Is Open
Use the account for your recurring tax payments. The statewide base sales tax rate is 7.25%, and district taxes raise city rates to between 7.25% and 11.75%. If you sell taxable goods, you can pay sales tax directly from a bank account when you file online with the California Department of Tax and Fee Administration. If you have employees, register with the Employment Development Department before you run payroll, and pay payroll taxes from the same account. Our EDD employer registration guide covers that process.
For free help with planning and recordkeeping, the California Small Business Development Center network offers advising. If you are also deciding how to structure the business, read our guide to starting an LLC in California before you file. A qualified attorney or CPA can help you weigh the choice, especially if you have multiple owners, an existing business, or other complex circumstances.