Whether you operate a sole proprietorship or a smaller C- or S-corp, a bank account is a necessary requirement for operating on a daily basis. That bank account you use to cover expenses and hold your income is a sign of maturity for the whole world to see. Believe it or not, there are a few things your bank account has in common with your corporation.
Credibility
When you open your first account as a young teen, you’ve gained a level of credibility and maturity that was previously lacking in your life. The ability to maintain a balanced bank account and effectively use credit tied to that account exhibits maturity that the whole world can see. Likewise, running your own business is a sign of credibility. The brand name you build for your corporation will be a marker for consumers and business partners that signals strength and success.
Convenience
Without a bank account, transactions in the modern world a difficult to say the least. Imagine always having to find the cash to pay for gas, groceries, and rent. Isn’t it much easier to just write a check to cover your expenses, or use credit and debit cards linked to that account? Owning a corporation is also a more convenient way of doing business. Forming a corporation makes it easier to present your brand to the world, secure funding from banks or credit unions, and even bring in shareholders for additional funding and capital.
Credit Rating
It is one of the most important numbers in the life of a modern individual. Your credit rating is a triple-digit number that immediately identifies your value to banks and other lenders considering a loan in your name. Your bank account is a key factor in a healthy credit rating. If you can manage debt while also balancing other expenses and generating income, that is a positive sign for lenders.
Corporations also have credit ratings that are linked to the value of the company when it comes to credit. Few companies can grow operations and expand their footprint without borrowing money, which means a good credit rating is required to secure the funding necessary to support those objectives.
Bonus Concept: Independence
Last but not least, your bank account and your corporation have another common factor: independence. Possessing a bank account shows that you are capable of independently managing your own finances, and can adequately balance income and expenses. Likewise, a corporation is an independent legal entity under the law. Further, it is a sign that had the faith in your idea and the ability to exhibit a product/service to the world that was worthy of building an entire company around that concept to support it.
