Opening a new account, Business or sole trader. what's the difference?

FFHillbilly
FFHillbilly Posts: 429
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edited 24 November 2023 at 8:32AM in Budgeting & bank accounts
want to open a new business account with Starling, the options are Personal account, Business account or sole trader account. 
The business which needs a new account is a partnership, not a limited company.
what's the difference between the business and sole trader accounts?

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  • Exodi
    Exodi Posts: 2,763
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    edited 24 November 2023 at 8:37AM
    https://www.starlingbank.com/resources/business-guides/setting-up-a-business-partnership-or-llp/

    "Starling currently offers business accounts to limited liability partnerships (LLPs) but unfortunately we cannot yet support general partnerships."
    Know what you don't
  • Zanderman
    Zanderman Posts: 4,615
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    As Exodi says above, Starling do not currently offer business accounts to partnerships, only to Limited Companies and Sole Traders.  So if you are a partnership Starling isn't for you!

    You'll find similar restrictions with, I think, all the app-based new style banks - they offer business accounts but not to partnerships. Which is frustrating as they are usually low cost or free to run, unlike the high street bank business accounts (which do offer them to partnerships)

    There are a few low cost though - most high street banks offer a free trial period (12-24 months or so) for new business (incl partnership) accounts and some, Virgin is one, offer free business account indefinitely. The partnership I'm in uses Virgin at the moment.
  • Only one person needs access to the account, so would it be possible to just open a sole trader account with Starling? 
  • Zanderman
    Zanderman Posts: 4,615
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    Only one person needs access to the account, so would it be possible to just open a sole trader account with Starling? 
    Up to you, but you would need to be fibbing to Starling about the business, and fibbing to banks about business accounts is rarely a good idea.
  • is a LLP easy to se up? I've heard of them but I always thought it was an American thing.
    is it essentially the same as the difference between a sole trader and a limited company. but the partnership version?
    if this is as simple to do as setting up a Ltd co I think thats the way to go as the company already pays an accountant to do all the books
  • Zanderman
    Zanderman Posts: 4,615
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    edited 24 November 2023 at 8:28PM
    It seems OTT to me to set up that merely to use one particular bank. 

    Surely it would be simpler to open a business account with a bank that does have partnership accounts?

    Virgin, as I said above, have a free business account for partnerships, and most other high street banks have offer similar accounts free for a year or so.  There's plenty of choice. And most can be operated via their apps, if apps are your preferred method of banking.

    Have a look at https://uk.virginmoney.com/business/current-accounts/m-account-for-business/ which is free (note this is the 'm' account, not their other business account).  You may need to open a personal account alongside beforehand, as they use personal accounts for security checks even if you're using the business account.

    Several websites summarise the other choices. 
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