I formed an LLC last month and opened a business checking account. Now the bank is asking for 'proof of business activity' within 60 days or they'll freeze the account. I haven't even started operating yet, no clients, no invoices, no transactions. What can I possibly provide to satisfy this? Has anyone dealt with this? I'm worried they'll close it and it'll look bad on my record.
Banking
The bank wants proof of business activity from a brand new LLC
Did you fund the account at all? Sometimes a small deposit from a personal account can show activity. But if it's truly zero, you might be stuck.
This hapepned to me. The bank wanted receipts or contracts. I sent a copy of my business license and an email from a potential client. They accepted that. Keep it simple.
What does your operating agreement say? Some banks just want to see that you have a plan. Write a one-page business summary and send it.
Are you sure it's a real requirement? I've had banks ask for that when they suspect the account is dormant or fraudulent. Might be worth calling and asking exactly what they need.
I second calling. A lot of times the frontline rep doesn't know the specifics. Ask for the business banking department and get the exact criteria in writing.
I did deposit $100 to open it. But no other activity. I'll try calling and ask for specifics. I don't have any contracts yet—just starting.
A $100 deposit might not count as 'activity' if it's from your own personal account. They want to see money coming in from customers. Could you do a small paid job for a friend and invoice them? That would create a paper trail ngl.
If you're not ready to operate yet, maybe consider a different bank. Some are more lenient with new LLCs. But switching accounts is a hassle.
I'm not ready to switch. I just want to satisfy them without lying. A friend offered to pay me for some design work, but it's not official. Would an invoice from me to them work?
An invoice alone might not be enough. They want to see the money actually move. If your friend pays you, even a small amount, that's proof. Just make sure you report it as income.
I wouldn't overthink it. Write a short letter explaining you're in startup phase and include any documents you have. If they still freeze it, you can always reopen later.
Actually, some banks will accept a signed affidavit stating you intend to do business. Ask if they have a form for that. It's worth a shot.
That's a good idea. Also, if you have a website or social media for the business, screenshots might help show you're active. Not sure if they'd take it, but it's evidence of effort.
I've seen banks accept a business plan. They just want to know you're not laundering money or something. Write down your goals, target market, and how you plan to make money. Keep it under a page.
Or you could just wait until you have actual activity. But if they freeze it, that might be a problem. Maybe ask for an extension? Some banks will give you more time if you explain.
Thanks, everyone. I'll call tomorrow and ask about an affidavit or a business plan. I'll also get that invoice from my friend and deposit the payment. Hopefully that's enough.