No fee business banking account

jonesMUFCforever

dahj said:

jonesMUFCforever said:

When you agree to work for free for the bank; the bank will give you a free business account - that seems fair to me.

If they are operating your account at a loss (long term) do you expect a sustainable service?

Not sure I understand the question but I will try - if you business is successful it should have a credit balance which the bank will ''borrow'' and lend overnight to other banks (LIBOR) - if the business is growing but needing lending facilities such as overdrafts and loans - then it is a win win for the banks.

ellectrastar

My business is not earning mega money, the same for all start ups. Neither will it ever make mega money. It's just going to pootle along until I can expand one way or another and maybe one day cover the losses I have made. I have no need for bank loans or overdrafts etc. My business bank account is never in the red as I keep it above this by transferring in. As far as I'm aware a partnership is pretty much the same as a sole trader, just a way for two or more people or businesses to be recognised as one trader. 
Am I right in thinking that a sole trader can use their personal bank account for their income and expenditure? I know I've read it's recommended you have a separate account for business purposes so it's clear what is and isn't business related, but would the fact you don't have to imply you could just open another personal account for your sole trader activities without breaching ts and cs? (Although if this is true I don't understand the purpose of Starling's "sole trader" account...) And to this end, as my partnership is in fact comprised of just two sole traders, would it be feasible for the partnership funds to go in and out of a normal joint account? Or for me to have a sole trader account with a written agreement that this is the way we will handle our partnership funds?
Due to earning zilch, as pathetic as it sounds, I really want to avoid any further outgoings, especially when "proper" business banking is really aimed at limited companies that have more criteria and rules they have to follow.

eskbanker

ellectrastar said:

Am I right in thinking that a sole trader can use their personal bank account for their income and expenditure? I know I've read it's recommended you have a separate account for business purposes so it's clear what is and isn't business related, but would the fact you don't have to imply you could just open another personal account for your sole trader activities without breaching ts and cs?

This is a linguistic trap that many seem to fall into!  There is nothing within the Companies Act or other legislation that specifically mandates that company finances must be managed via a business account rather than a personal one, but that doesn't mean that banks will accept a personal account being used for business purposes, so none of them do (to the best of my knowledge anyway).

Eco_Miser

There's no legal requirement for a sole trader to have a business account, but the T&Cs of most, if not all, personal accounts forbid their use for business.

You could try using a personal account, but don't be surprised if it gets frozen, closed, or even marked as fraudulent, with consequent repercussions on your real personal account(s).

Zanderman

ellectrastar said:

......but would the fact you don't have to imply you could just open another personal account for your sole trader activities without breaching ts and cs?.....

The ts and cs are the bank's ts and cs and those ts and cs prohibit you from using a personal account for business. 
Simple as that.

pmduk

OP, I look forward to hearing that you do not charge your customers.

Ergates

There are a whole host of regulations in place to protect people and their money which don't apply to businesses (or only apply to small businesses, or apply differently to businesses).  If banks allowed customers to mix business and personal banking in one account it would be a nightmare for them to manage, so they don't.

ellectrastar

Thanks all. I'll probably go the route of opening a sole trader account with a written agreement between partners that they are happy that finances are handled in this way.