Bank account for freehold management company

citizen1234

Hi - I've recently bought a flat (one of 3 within a converted house) with a share of freehold, and am now a director of the management company. Myself and the other directors want to open a bank account to manage the shared expenses (e.g. repair work, shared hallway energy bill) - can anyone confirm if this has to be a business bank account? If so, does anyone have recommendations for suitable accounts? It's unlikely to be used regularly and we would be depositing the account with online bank transfers rather than cash deposits etc. Thank you. 

Daliah

I have no personal experience with this subject myself but I would have thought that it would be logical, at a minimum, to use a business account for this, so that there is no question about mixing personal and company finances. You could try Starling Bank or Tide (Tide are not a bank, so no FSCS cover)

There also seem to be rules you have to follow for such companies, but you probably know that: https://www.gov.uk/set-up-property-management-company

Sandtree

citizen1234 said:
can anyone confirm if this has to be a business bank account? 

It will be holding the company's money and so it has to be the company's name. There is no law that says it's account has to be a "business account" because the law broadly doesn't differentiate between personal, business and commercial banking (with only a couple of exceptions). 

In reality you aren't going to be able to open any other type of account other than a Business one because Your Company Name Limited isn't going to fit into the First Name/Surname format of personal lines ones plus its normally against the T&Cs of a personal lines account to use it for business purposes which it maintain its asset and collecting monies from you will be considered.

Starling do a currently fully fees free banking but why are you looking to switch from its current provider?

citizen1234

Thanks both - there isn't a current provider and it seems the company hadn't been using anything in the past. I will take a look at Starling.

7sefton

I’m amazed you’ve been able to run a share of freehold without a bank account… how have you collected contributions or paid suppliers?

In any case, I think you might find a lot of accounts aren’t open to freehold company accounts.

Ours was with HSBC for years and when I tried to switch it was a nightmare:

Mettle (NatWest) wouldn’t accept us because we didn’t meet their criteria. 

TSB and Virgin Money wouldn’t accept us because we weren’t profit making, and we weren’t eligible for their charity accounts because we were a limited company not a registered charity. So we were caught between a rock and a hard place.

Other banks either weren’t offering new business accounts (although this was the height of the covid loans period), or demanded that every shareholder went through a full application even if they weren’t a director (and some of the shareholders refused).

Good luck - hope you find it easier than we did!

WalkAboutCreek

Just wondered if anyone has had any success opening an account? We are classed on Companies House as a Residents Property Management company.  Have had similar experience to 7sefton when trying to switch from a building society to a bank with online facilities  - no success so far. Have tried HSBC, Co-op and Tide.

Prudent3

We are just about to go through a similar process as Lloyds now want to charge a monthly fee for the account. Has anyone had any success in finding a bank to take on the account?
Thanks

boingy

Depends how you are set-up but look for a "community account". They bridge the gap between charity accounts and business accounts. Typically aimed at non-profit organisations like clubs and societies.

penners324

I've set up a Virgin Money small busuness account for this purpose 

Sunnyshe

@penners324 I am in a similar position moving our management company account from Lloyds to Virgin Money.  On the application form can you advise what Entity type you chose.  I'm thinking other non-financial entity, but then not sure about the sub-group.  Any advise gratefully received