Opening a business bank account: checks and refusals

Understand why the bank asks

Banks have customer due-diligence obligations under the Money Laundering Regulations 2017. They need to understand who the customer is, who owns or controls it and the purpose of the relationship. Their work also continues after the account is opened.

For a company, that can mean checking the registration, addresses, directors and beneficial owners. A beneficial owner is the person who ultimately owns or controls the business, which may require looking through another company in the ownership chain.

The exact documents depend on the bank and the application. Do not treat an online list as a guarantee that nothing else will be requested. Overseas ownership, an unusual transaction pattern or a complex group can create additional questions.

Start with a plain description of the business. What does it sell, to whom, where and how does it get paid? A specific explanation is more useful than a broad phrase such as consultancy or online services when the actual activity is narrower.

Keep that description consistent with invoices, the website and the application. If the business has changed direction since incorporation, explain the change openly. Apparent inconsistencies are easier to understand when accompanied by a concise explanation and supporting records.

Build a usable application pack

Ask the bank for its document requirements before sending sensitive records. Use the bank's secure submission route and provide the version requested. If a document is unavailable, ask which alternative it accepts rather than repeatedly uploading the same unsuitable file.

The table is a preparation framework, not a universal statutory document list. A bank may verify information electronically or ask for additional evidence. A newly formed business should distinguish forecasts from existing trading rather than presenting hoped-for turnover as established income.

Tell the bank if the trading address differs from the registered office. That is not necessarily a problem, but leaving the distinction unexplained can make documents appear inconsistent. The same applies where the director's name has changed or an old address appears on identification records.

Keep Companies House records accurate

The public register is one source a bank may use to understand a company. Check the registered office, officers, ownership information and the description of business activity. Correct genuine errors through the proper Companies House process.

Mandatory identity verification began on 18 November 2025 for relevant new directors and people with significant control, often shortened to PSCs. Existing roles entered a transition, with the precise timing depending on the person's role and the company's filing cycle.

A director and a PSC are not interchangeable roles. Someone holding both may have to connect their verified identity to each role separately. Companies House guidance sets out the applicable personal-code and filing requirements, including role-specific periods.

Do not assume everybody can wait until a single November deadline. Check the current guidance and the dates shown for your circumstances. Verification of identity does not automatically update every appointment or replace the need to make the required filing.

Bank onboarding remains separate. A Companies House personal code is not bank-account approval and does not remove the bank's own checks. Keep the code secure and provide it only through an appropriate authorised process. Ask your accountant or company secretary to help if several roles or companies are involved.

Explain the account's intended activity

A bank needs to understand the sort of transactions it is being asked to handle. Describe likely receipts and payments, the places customers and suppliers operate and whether the business expects cash or international transactions.

Do not guess at a neat answer because the form is awkward. If the business has seasonal activity, explain it. If most receipts will initially come from one contract, say so. Where forecasts are uncertain, identify them as estimates and describe the basis.

Source of funds means where particular money comes from. Source of wealth is a broader question about how someone's assets were accumulated. The bank may ask either depending on the circumstances. Respond to the question actually asked and ask if the wording is unclear.

For an initial director contribution, keep evidence of the route the money took and how it is recorded in the business. Your accountant can help describe whether it is share capital, a director's loan or another arrangement. Do not invent a classification simply to complete the application.

Keep a copy of what you submitted. If activity later changes materially, such as adding a new market or transaction type, ask the bank what it needs to update. An account profile that still describes the first week of a business may no longer reflect how it trades.

If the application stalls or is refused

Ask whether the application is awaiting information, under review or declined. Those are different states. A request for evidence is something you can answer; a commercial refusal may mean the product does not fit the bank's criteria.

The FCA's September 2024 account-access review found issues including non-specific financial-crime concerns, inconsistent use of reputational risk and difficulties meeting due-diligence requests. It expected clearer processes and communication within the applicable regulatory framework. Those findings do not establish why any individual business has been declined.

Request the reason the bank can provide and any available review or complaints route. It may be legally restricted in what it can disclose. Avoid assuming that a limited explanation proves wrongdoing by either the bank or the applicant.

If the problem is an incorrect fact, identify the fact and supply evidence. If a document request cannot be met, explain why and ask for alternatives. A short response answering each item is easier to process than a long argument about how legitimate the business is.

Keep essential business planning separate from an expected approval. An application reference does not provide an account into which customers can reliably pay. Consider the operational need for an alternative application without treating repeated submissions as a guaranteed route to acceptance.

Sole traders and companies need different records

A sole trader and a limited company are different legal arrangements. General sole-trader setup rules do not require a separate business bank account simply because trading has begun. However, the terms of a personal account may restrict business use.

A separate account can make record keeping clearer by separating trading transactions from personal spending. The choice of account still needs to fit the provider's permitted use and the business's actual activity.

For a limited company, distinguish company money from the director's money. An account in the director's personal name is not the same legal account as one held by the company. Ask an accountant how to record any early business transactions paid personally while onboarding is underway.

Changing from sole trader to company is therefore more than changing the account's display name. Explain the new entity to the bank and the providers paying into the account. Ask how existing payment arrangements, contracts and records should be handled.

Also check what sort of provider you are approaching. An app-based business account may be supplied by a bank, an e-money institution or a payment firm. Our bank versus e-money guide explains why that distinction matters.

Nominate someone to co-ordinate the application evidence and retain a dated list of what was submitted. If the bank asks again for an item, that record helps distinguish a missing document from a request for a newer version or additional detail. Keep access to sensitive evidence limited to the people who need it.

What to do next

Treat the application as a small evidence exercise. Nominate one person to maintain the document list and keep answers consistent, with access restricted to the people who need the information.

1. 1Identify the legal entity that needs the account and who can act for it.
2. 2Check the bank's current eligibility and accepted document requirements.
3. 3Reconcile ownership, addresses and activity with current records.
4. 4Check Companies House verification and filing dates for each relevant role.
5. 5Submit the requested evidence securely and keep a copy of the answers.
6. 6Track unanswered requests and ask for a clear status if progress stalls.

Timescales depend on the provider, application complexity and completion of checks. A simple ownership structure may require different work from a group with overseas entities, but neither creates a reliable opening-time promise.

Once the account is approved and usable, plan payment permissions and any switch from an existing account. Getting access is the first step; making it work properly for payroll, customers and bookkeeping is the next.