A business bank account separates your professional transactions from your personal finances — a separation that matters for bookkeeping, tax filing, CRA compliance, and professional credibility. For corporations, a separate business account is legally necessary. For sole proprietors and partnerships, it is not legally required but is practically essential once your business generates any meaningful revenue. The cost of the account is low; the cost of untangling co-mingled finances at tax season is much higher.
This guide covers who needs a business account, what documents each business type requires, how to choose between institutions, and what to set up immediately after the account opens.
Do You Need a Business Account?
The answer depends on your business structure, but the practical answer for almost every business owner is yes.
Corporations are required to have a separate bank account because a corporation is a legally distinct entity from its shareholders and directors. Corporate revenue belongs to the corporation, not to you personally. Depositing corporate income into your personal account creates a legal and accounting problem — the bank may flag it, and CRA will question it on audit.
Sole proprietors and partnerships are not legally required to maintain a separate account. The law treats a sole proprietor and their business as the same person. But the CRA expects you to accurately report all business income and claim only legitimate business expenses — and doing that from a co-mingled account is significantly harder than from a dedicated business account. Every transaction has to be classified, receipts have to be matched, and personal transactions have to be stripped out. A bookkeeper or accountant will charge you more time to sort this out than the annual cost of a business account.
There is also a professional credibility argument. Clients who receive an invoice with payment instructions for “Jane Smith Savings” rather than “Jane Smith Consulting” or your incorporated name will notice. Business accounts allow you to accept payments and issue cheques under your business name.
Required Documents by Business Type
Call the bank before your appointment to confirm their specific list — requirements vary between institutions. The lists below cover what most major Canadian banks require.
Sole Proprietorship
If you operate under your own legal name (e.g., “Jane Smith” or “Jane Smith Consulting”), many banks will open an account with personal ID and your SIN alone. If you operate under a trade name (e.g., “Maple Studio”), you need a provincial business name registration — called a Master Business Licence in Ontario, a business name registration in BC, and equivalents in other provinces. Registration is done through your provincial registry, typically costs $60–$80, and takes a few days online.
| Document | Notes |
|---|---|
| Government-issued photo ID | Passport or driver’s licence |
| Social Insurance Number | Required |
| Business name registration | Required if operating under a trade name |
| Business Number (BN) | Required if GST/HST-registered |
| Proof of address | Utility bill or bank statement |
Partnership
Partnerships require documentation that establishes who the partners are and how decisions are made, because the bank needs to know who has authority to operate the account.
| Document | Notes |
|---|---|
| Signed partnership agreement | Establishes partner names, shares, signing authority |
| Government-issued photo ID | For each partner |
| Business registration | Provincial registration of the partnership name |
| Business Number | From CRA |
Corporation
Incorporated businesses require the most documentation because the bank must verify the corporation’s legal existence, its directors and officers, and who is authorized to sign on behalf of the corporation.
| Document | Notes |
|---|---|
| Articles of Incorporation | Federal (Corporations Canada) or provincial |
| Certificate of Incorporation | Issued at time of incorporation |
| Corporate Resolution | Board resolution authorizing account opening and naming signing officers |
| Corporate Minute Book | May be requested — contains board meeting records |
| Personal ID | For all signing officers (directors, authorized signatories) |
| Business Number | Corporate BN from CRA |
Corporate accounts almost always require an in-branch appointment. Bring a complete package — missing documents means rescheduling.
Step-by-Step: Opening a Business Account
Step 1 — Register Your Business
If you have not already registered your business, this is the first step. The registration authority depends on your business type and whether you want provincial or federal status.
Sole proprietors and partnerships register with their provincial registry. In Ontario this is the Ontario Business Registry; in BC, the BC Registry. Most provincial registrations are completed online in 30–60 minutes and cost $60–$100.
Corporations can incorporate provincially (lower cost, simpler, but you operate only in that province without additional registration) or federally through Corporations Canada ($200 online). Federal incorporation gives you the right to use your business name in all provinces, though you may still need to register extra-provincially in provinces where you operate.
Step 2 — Obtain a Business Number from CRA
A Business Number (BN) is the nine-digit identifier CRA uses to track your business across all its tax accounts. Registration is free at canada.ca and takes about 15 minutes online. You receive the BN immediately.
When you register for a BN, you will also set up the program accounts your business needs:
- GST/HST account: Required if your annual revenue exceeds $30,000. Once registered, you collect GST/HST from clients and remit it to CRA on a quarterly or annual basis (quarterly is the default for new registrants).
- Payroll deductions account: Required if you have employees. You deduct CPP, EI, and income tax from employee wages and remit them to CRA.
- Corporate income tax account: Required for incorporated businesses.
Most banks require a BN to open a business account. Register before booking your bank appointment.
Step 3 — Choose Your Bank
The right institution depends on what your business actually needs from its bank. The main trade-offs are fees versus features versus access.
Big Five banks (RBC, TD, Scotiabank, BMO, CIBC) offer the most comprehensive service — full lending relationships, business credit cards, in-person support, cash handling, international wire transfers, and payroll services. Monthly fees range from $6 for basic plans (15–25 transactions) to $120+ for premium plans. Most banks waive monthly fees if you maintain a minimum balance, typically $5,000–$25,000. The fee waiver can make a Big Five account effectively free once your business has cash reserves.
Digital business accounts (KOHO Business, Wise Business) suit freelancers, consultants, and service businesses that operate almost entirely online. KOHO Business has no monthly fee and covers basic chequing, debit card, and e-Transfer functionality. Wise Business is optimized for international payments — holding and sending money in multiple currencies at mid-market rates, which is significantly cheaper than Big Five international wire transfer fees. Neither handles cash deposits well, which is a deciding factor if your business receives physical cash.
Credit unions (Desjardins in Quebec, Coast Capital in BC, local credit unions elsewhere) often charge lower fees than Big Five banks and provide more relationship-oriented service. They are a strong option for established small businesses that want in-person support without Big Five pricing.
| Business Type | Recommended Institution | Key Reason |
|---|---|---|
| Freelancer / consultant | KOHO Business or Wise | No monthly fee, digital-first |
| Retail / cash-handling business | Big Five or credit union | Cash deposit infrastructure |
| International clients / suppliers | Wise Business | Multi-currency, low FX fees |
| Seeking future business credit | RBC or TD | Lending relationship established early |
| Quebec-based business | Desjardins | Local presence, French-language service |
| BC-based business | Coast Capital or TD | Regional presence |
Step 4 — Apply
Sole proprietors can typically apply online. Incorporated businesses book an in-branch appointment with a business banking advisor. Appointments usually take 45–90 minutes; arriving with a complete document package reduces this to 45 minutes or less.
At the branch, you will select your account tier (basic vs. premium), choose whether you want a debit card, order cheques if needed, set up signing authorities for the account, and configure online banking access.
Step 5 — Fund and Activate
Most business accounts have a nominal opening deposit requirement ($0–$500 depending on the institution and account type). Fund the account via e-Transfer from your personal account, direct deposit from a client, or cash deposit at a branch.
Monthly Fee Comparison
Business account fees vary significantly between account tiers. The main cost levers are transaction volume (monthly included transactions before overage fees apply) and cash deposit limits.
| Account Tier | Monthly Fee | Included Transactions | Cash Deposit Limit |
|---|---|---|---|
| Basic (Big Five) | $6–$25 | 15–25 | $2,500–$5,000 |
| Mid-tier (Big Five) | $25–$60 | 50–75 | $10,000–$15,000 |
| Premium (Big Five) | $60–$120+ | 100–unlimited | $25,000+ |
| KOHO Business | $0–$9 | Unlimited e-Transfers | No cash deposits |
| Wise Business | $0 + per-transaction | Unlimited | No cash deposits |
| Credit union (typical) | $10–$35 | 20–60 | Varies |
A business account’s “monthly fee” is also the price of the lending relationship, the phone support line, and access to business credit products. A $25/month fee that includes unlimited transactions and comes with access to a $50,000 business line of credit may be better value than a $0 digital account that offers none of those.
After Opening: First Week Setup
Configure accounting software integration. QuickBooks, Xero, Wave, and FreshBooks all connect directly to most Canadian banks and import transactions automatically. Setting this up in week one eliminates manual transaction entry for the life of the business — the hours saved over a year are substantial.
Set up a GST/HST holding account. If you are GST-registered, you collect tax from clients and remit it to CRA quarterly. The money is not yours — it belongs to CRA. A simple savings account at the same institution, labelled “GST holding,” lets you transfer the GST portion of every invoice received immediately. When your remittance is due, the money is sitting ready. Many small businesses run into cash flow problems because they spend GST-collected revenue and cannot cover the remittance.
Apply for a business credit card. A business credit card provides a 21-day grace period on purchases (improving cash flow), earns rewards on business spending, and keeps business expenses automatically categorized separately from personal charges. Applying through your banking institution at account opening is straightforward and establishes a credit relationship at the same place you bank.
Pay yourself a defined salary or owner’s draw. Decide on a regular transfer amount from the business account to your personal account. Inconsistent personal withdrawals from a business account are harder to categorize and complicate both your personal and business tax returns.