How To Open A Business Current Account

Summary:

• The importance of having a BCA
• Why Alliance BCA?
• Easy, 3-step process

The importance of having a business current account (BCA)

As outlined in our article on choosing the right business entity for your new company, a major differentiator between registering a business (sole proprietorship/partnership), a company (Sdn Bhd/Bhd), or a limited liability partnership, is how much personal liability the business owners are exposed to in the event their business is declared bankrupt or in debt.

Even though sole proprietorships and partnerships are pass-through entities (where the business owner files taxes based on the personal income tax rate), it is still important to separate your business and personal accounts. These assets need to be separated to, not just for filing purposes and planning cash flow, but also because come tax time, you will need a clear business account where you can centralise all your business income and allowable business expenses and capital allowances.

If you do not separate your business and personal assets, tax time will be a headache, even if you hire a professional tax accountant. Down the road, if the Inland Revenue Board (LHDN) comes to audit your tax returns, it will be incredibly cumbersome sorting out your assets – especially since by law, you are required to keep your accounts and tax records for up to seven years.

Besides making tax filing season and bookkeeping simpler, having a BCA gives you more options for future growth. How? First, by legitimising your business if you ever need to get a business credit card or an SME loan in the future.

Additionally, a BCA ensures fluidity and operations in your day-to-day running of the business, especially if your business processes a lot of transactions to and from different stakeholders (employees, vendors, customers, licensing authorities, and technology providers) regularly, across different payment platforms (cheques, bank transfer, QR code, e-wallets).

Not only is a BCA better equipped to juggle your business' various needs, it also makes it easier to build a credit profile based on your history of transactions, and to show business activity over a sustained period of time.
 

Why Alliance BCA?

Alliance Bank is a trusted name in business banking, especially with small and medium enterprises (SMEs). As of March 2022, SME loans accounted for almost a third of the group's total loans. To build on this, Alliance Bank wants to double its SME loans over the next five years to 2027. To support this, Alliance BCA features a comprehensive suite of business banking solutions to accelerate your business growth, while giving SME customers access to a wide range of solutions and personalised advisory for their businesses.

In addition to providing instant account access and day-to-day operational support, Alliance BCA also gives business owners instant access to supportive value-added services via its BizSmart^® Solution partner network and helping Alliance Digital SME customers expand their reach and connect with other SMEs via its SupportLOKAL! initiative.
 

Opening your BCA: An Easy, 3-step process

With just a RM500 deposit, you can set up your Alliance BCA account and unlock a host of growth opportunities for your business. Before you start applying, get your supporting documents ready. Here's a quick checklist of documents you may need across the five main business entities:

Once you have all your documents ready, head over to www.alliancebank.com.my/banking/business/deposit-accounts, and click ‘Apply here ’ depending on your business entity. Fill in and submit the application form online.

An Alliance Relationship Manager will contact you within 1 working day to check on documents required and to schedule an appointment for a quick verification process, i.e. biometric IC verification. Don't worry if you are too busy to stop by the bank, the Relationship Manager can instead schedule a visit to your business premises and conduct the verification on-site at your convenience.

Once verification is completed and you deposit the minimum RM500, your Alliance BCA number will be generated, and you can start reaping all the benefits of a BCA. Further down the road, once your business transactions take off and growth opportunities come knocking, your BCA records can help your applications for Alliance Digital SME loans.

If you need a quick cash injection to accelerate your new business growth or get your brand name out there, you can apply online for Alliance Digital SME Express Financing, a collateral-free SME loan of up to RM200,000. Need to boost your company's cash flow for growth and expansion? Consider Alliance Digital SME Cash Flow Financing, a collateral-free SME loan of up to RM1 million.