Singapore is home to many different businesses from many different industries. It has always had one of the most stable and active economic conditions over the years. In 2020 it was named as the most open market economy in the world for having the most business-friendly environment. These businesses have served and continued to carry the Singapore economy for years.
Businesses from engineering, mining, architectural, and environmental industries can all be found in the busy districts of Singapore. Even though Singapore has one of the most relaxed policies and regulations when it comes to business transactions, they still make sure that these policies are strictly observed and followed. This implementation is what makes Singapore be always at the top. We have the most comprehensive policies when it comes to conducting a business from company incorporation Singapore procedures up to filing taxes.
Since there are many businesses, one of the things that every business must do is to set up their own corporate bank account. Singapore is so used to seeing these kinds of businesses that corporate bank accounts are not something new. However, some businesses, especially the small ones, sometimes do not acknowledge the need for a corporate bank account. After the company incorporation Singapore registration, they still use their personal bank account in conducting business. To know more, let us talk about the reasons why a corporate bank account is a need when you conduct business in Singapore.
What is a corporate bank account?
It is a bank account that serves many purposes to various businesses. It is a separate bank account solely for the use of business transactions that is happening inside the company. This to make sure that all business finances are separate and can be accounted for in an organized manner. All accounting firms in Singapore suggest and advise their client to set up this kind of bank account to be able to track finances in the company. Aside from obvious reasons, here are more reasons why a corporate bank account is important.
3 reasons why you need it
#1 Accurate and clean accounting
Accounting is an important part of every business. Accounting is found in every finance that is why it is a vital part of its success. Accounting firms in Singapore require their clients to set up a corporate bank account for the accounting system in every company to be more effective and efficient. This way accounting firms in Singapore can easily track, manage, and improve the accounting system in the company.
Mixing personal and business finances in one bank account does not look good as it may lead to many complications in the future. It may even lead to missed tax filing which is reminded during the company incorporation Singapore procedure. Tax filing is important because it is a duty of a company to the government and it may lead to fines and even jail time if missed. Accounting firms in Singapore may help set up corporate bank accounts to know which banks are preferable.
#2 Protect personal assets from legal liabilities
Businesses involve a lot of risks and uncertainties. Even if you invest a lot of money, success is not always guaranteed. That is why protecting your personal assets and everything that you own aside from the business is important. This is to make sure that when things go wrong, you have a financial fallback. Policies and regulations in Singapore require owners of businesses to pay with what they have when things go wrong.
For example, if a business fails to pay its debts, Singapore usually requires owners to pay with what they have in their bank accounts. Mixing personal and business money may lead to business owners losing everything that they have. This is why accounting firms in Singapore advise clients to set up a corporate bank account. The setup is even more preferable even before the company incorporation Singapore procedure is done.
#3 For professionalism
Providing your personal bank account to your clients also looks unprofessional. When doing business transactions it is important to provide their clients with business accounts as well. For example, you would not want your biggest client to pay what you direct to your personal bank account. Having a corporate bank account early on the company incorporation Singapore process is advisable.
Hire a help
Setting up a corporate bank account may be too time-consuming. That is why there are accounting firms in Singapore to help you. WLP Group can guide you from the company incorporation Singapore process up to set up separate bank accounts. Contact us today to know more.