Reply to: New Contractor, Ltd Co. - Recommended Bank A/c?

[Jubber]

I have seen banks transferring funds between company and personal bank accounts when one has been overdrawn beyond approved limits, but only because the mandate specifically allows for it - i.e. the signatory had given approval in advance for it to happen. If you havn't given your permission to your bank, then they can't do it. Perhaps it is time for people to start reading what they are signing!! This is especially prevailant when the business has asked for an overdraft facility or loan - it is effectively a director's personal guarantee.

Aha ! - Glad I do keep mine separate. Time to check the small print anyway. Many thanks.

[philip@wellwoodhoyle]

I have seen banks transferring funds between company and personal bank accounts when one has been overdrawn beyond approved limits, but only because the mandate specifically allows for it - i.e. the signatory had given approval in advance for it to happen. If you havn't given your permission to your bank, then they can't do it. Perhaps it is time for people to start reading what they are signing!! This is especially prevailant when the business has asked for an overdraft facility or loan - it is effectively a director's personal guarantee.

Re bank account recommendations, we always recommend Cater Allen to our clients and have had no real problems with them. One or two clients have told us about minor niggles, but nothing serious enough for them to move away elsewhere. The Cater Allen customer service team is really excellent - calls answered promptly and dealt with by someone who really knows what they're doing. Most contractor accountants have "special" deals with them, sometimes to waive the minimum balance requirement, and sometimes to enhance the interest - we have an agreement to do both, so the deal you get through an accountant is often better than shown on their website.

[sidknows]

Hi, Newbie here with first IT contract coming up soon. I am setting up a Ltd Co. and appointing SJDAccountancy, and I need to setup a business bank account. I have tried searching this forum for 'business bank' and other keyword variations but could not find a recent applicable post. Ideally I am looking for some positive recommendations. I have Natwest and A&L current accounts, and prefer the former for customer service and general convenience, but A&L slightly better rates on various products.

Another newbie post starting with sjd !!

I'm sure they would have recommended a bank to you as they have a link with one or two

[Jubber]

Your limited company and your are separate legal entities so they can't help themselves to money from your business account if your personal account is overdrawn and vice versa.

However if you had a business savings account and your business current account was overdrawn they can help themselves to money from the business savings account to put the business current account in credit. Likewise they can do the same with personal bank accounts.

If you have multiple accounts with one bank they are allowed to link all the data together so, if your business is not doing well and you want an overdraft on your personal account the bank can more easily turn round and go "No" even if there is nothing on your personal credit record. There as if your business and personal accounts are in different banking groups they can't see this information.

All what I've written should be in the T&Cs of your bank.

I stand corrected. It was definitely suggested that I should keep them separate. I take your point about the Limited company. I personally would still keep them separate.

J

[Archangel]

Not sure I agree with you there. I think it is only personal accounts that the £30k is guaranteed, not business accounts.

Also, the risk of a big UK bank leaving you without your money is very small and there is also "lost" interest when transfering between business and personal accounts if you hold them with different banks. I find instant transfers between business and personal accounts very useful which you wouldn't get if you used different banks.

"small" businesses are also covered (its £35k by the way)

A small business is one with a turnover < £2.8m, profit < £1.4m and < 50 staff.

So if YOU had 35k in a bank and YOURCO had 35k in the same bank then both deposits would be covered.

[firehawk]

Royal Bank of Scotland. I have my personal account with them, so whenever I get paid, instant transfer of money to my personal account from business as its under the same company....

[minstrel]

Agree it's a good idea to keep personal account in different bank to company accounts incase the bank goes through hardtimes as your own guaranteed the first 30k of savings.

Not sure I agree with you there. I think it is only personal accounts that the £30k is guaranteed, not business accounts.

Also, the risk of a big UK bank leaving you without your money is very small and there is also "lost" interest when transfering between business and personal accounts if you hold them with different banks. I find instant transfers between business and personal accounts very useful which you wouldn't get if you used different banks.

[r0bly0ns]

Your limited company and your are separate legal entities so they can't help themselves to money from your business account if your personal account is overdrawn and vice versa.

However if you had a business savings account and your business current account was overdrawn they can help themselves to money from the business savings account to put the business current account in credit. Likewise they can do the same with personal bank accounts.

If you have multiple accounts with one bank they are allowed to link all the data together so, if your business is not doing well and you want an overdraft on your personal account the bank can more easily turn round and go "No" even if there is nothing on your personal credit record. There as if your business and personal accounts are in different banking groups they can't see this information.

All what I've written should be in the T&Cs of your bank.

Thanks SueEllen, I am aware of all you say and personaly think you are right that the bank cannot help themselves to business / personal accounts to pay off the other.

However if Jubber is correct and they can, I want to know!

[SueEllen]

No they can't. The company money is an account in the company name. You are an employee of that copmany, the bank has no right to take that money.

Image if a employee at BP went overdrawn, would the bank then take money from the BP account to cover the overdraft

.

Your not an employee, you are a director.

Most directors on this board are signatories for the limited company bank account.

Therefore if you personally have a poor credit rating the bank can refuse to open an account for the limited company with you as a director or give your limited company overdrafts.

If an employee has a poor credit rating the bank will not refuse to open the company the employee works for a bank account.

[MikeC1408]

"Always hold your business account at a different bank from your personal accounts" is the advice I've been given. If everything is with one bank and one of your accounts goes 'wayward', the bank can help themselves to other money in your other accounts.

No they can't. The company money is an account in the company name. You are an employee of that copmany, the bank has no right to take that money.

Image if a employee at BP went overdrawn, would the bank then take money from the BP account to cover the overdraft

Agree it's a good idea to keep personal account in different bank to company accounts incase the bank goes through hardtimes as your own guaranteed the first 30k of savings.

[SueEllen]

This is quite scary if true, and would definately lead me to changing one (or more) of my accounts.

Can you link to anything that may indicate this as fact rather than hearsay?

Your limited company and your are separate legal entities so they can't help themselves to money from your business account if your personal account is overdrawn and vice versa.

However if you had a business savings account and your business current account was overdrawn they can help themselves to money from the business savings account to put the business current account in credit. Likewise they can do the same with personal bank accounts.

If you have multiple accounts with one bank they are allowed to link all the data together so, if your business is not doing well and you want an overdraft on your personal account the bank can more easily turn round and go "No" even if there is nothing on your personal credit record. There as if your business and personal accounts are in different banking groups they can't see this information.

All what I've written should be in the T&Cs of your bank.

[r0bly0ns]

"Always hold your business account at a different bank from your personal accounts" is the advice I've been given. If everything is with one bank and one of your accounts goes 'wayward', the bank can help themselves to other money in your other accounts.

This is quite scary if true, and would definately lead me to changing one (or more) of my accounts.

Can you link to anything that may indicate this as fact rather than hearsay?




(you have no idea how may times I had to retype this on a Saturday night after lots of cider....)

[FarmerPalmer]

Try here :

http://www.anbusiness.com/business_a..._account.shtml

free banking for life, and interest paid

[Sockpuppet]

"Always hold your business account at a different bank from your personal accounts" is the advice I've been given. If everything is with one bank and one of your accounts goes 'wayward', the bank can help themselves to other money in your other accounts.

How can they?

The money in the company account is not mine. They would be breaking the law to take it to pay my personal account.

My personal current account has a £2k interest free overdraft (hangover from my uni days) that is always at £2k overdrawn. My company account has £20k+ sitting in the reserve account earning some fat %.

Jiff all natwest can do about it.

[Jubber]

"Always hold your business account at a different bank from your personal accounts" is the advice I've been given. If everything is with one bank and one of your accounts goes 'wayward', the bank can help themselves to other money in your other accounts.

I've used Cater Allen for business, but now with LloydsTSB business who are great. So far they have fallen over themselves to be nice and offer me all sorts of things I don't need.