A corporate account is a banking account purposely designed to cater for the business needs of companies and businesses. It is used to manage the financial assets of a company or business.

Some of its features include receiving payments from customers, managing payroll, keeping track of business expenses, and access to advanced merchant tools.

Here are the requirements financial institutions in Nigeria will ask you to provide to set up a corporate account:

• Valid Means of Identification
• Memorandum and Articles of Association (MEMAT)
• Board Resolution from Board of Directors
• Certified True copy of form CO7 (Particulars of Directors)
• Proof of Residential Address of Signatories to the account and Directors of the company
• Passports Photograph of the signatories to the account
• Bank Verification Number of Directors or Proprietors
• Tax Identification Number (TIN)
• Utility bill
• Evidence of application for SCUML certificate
• Residential permit (If the business is being established by foreign Nationals)
• Two references. One of them must be a corporate account holder.
• Corporate Account Opening Form which must be signed by the company’s designated signatories with all required documents attached to the form
• International Passport, Driver’s License, National Identity Card or Voters card) of Directors/Proprietors can be accepted as means of identity.

Although there are some small business owners who use savings accounts to manage their business transactions, corporate accounts will give you access to more great features.

Apart from the benefits corporate accounts have over savings accounts, it also shows the seriousness and trustworthiness of your business to your customers.

Current Account vs Savings Account

A savings account is designed for personal use. It is designed to handle frequent personal financial transactions.

So, what distinctions should an entrepreneur know to make a decision on opening the most suitable account for their business?

Based on account features, overdraft, purpose, compliance requirements, suitability, account management, transaction volume and fees, and minimum balance, a corporate account is more suitable for a company or an entrepreneur.

Differentiate corporate accounts from savings

Dedicated customer support

Corporate: Financial institutions provide specialized customer support for business account holders.

They assign account officers or dedicated relationship managers to the holders to promptly attend to whatever challenges they might face.

Savings: This isn’t the case for savings account holders. They only have access to general account inquiries.

They are expected to go directly to the customer support desk for inquiries.

Suitability

Corporate: Corporate accounts work best for entrepreneurs who want to have access to business features.

Savings: A savings account is most suitable for people who operate an account for personal use rather than a large-scale business.

Legal and compliance requirements:

 Corporate: Business owners must fulfil legal and compliance requirements when opening a business account.

Such legal requirements include a business registration certificate, references from corporate Business owners, and identification of business owners and directors.

Compliance requirements include evidence of registration with SCUML and financial reporting when transactions exceed a certain amount.

Legal and compliance requirements are stringent and mandatory for opening a corporate account in Nigeria.

Savings: Opening a savings account requires less stringent legal requirements. With a means of identification and proof of address, you can have a personal savings account set up in your name within minutes.

Minimum balance

Corporate: There is always a minimum balance you need to maintain to get access to the full features and other account privileges.

Savings: The minimum balance required to maintain a savings account is usually low or zero.

However, most Nigerian banks now impose maintenance fees on savings accounts.

Overdraft

Corporate: On a current or business bank account, you can enjoy an overdraft.

Access to overdraft means you can withdraw more money from the account than what you actually have as a balance.

Savings: No Nigerian bank can give you overdraft privilege with savings.

Account features

Corporate: Corporate accounts have many account features such as check-writing capabilities, merchant services, and overdraft protection among others.

Savings: Basic features are peculiar to savings accounts such as ATM access, deposits, and withdrawal.

It doesn’t have advanced functionalities for business operations.

Transaction volume

Corporate: Business owners have higher transaction volumes involving regular inflows and outflows.

They are designed to handle larger transactions including a certain number of free transactions per month. However, fees may apply to additional transactions.

Higher transactions may be subject to reporting to the appropriate government agency as a means to curb money laundering.

 Savings: There are lower transaction volumes for savings accounts. Your account may be subject to an account upgrade if you’re a savings account holder.

The similarity between a Corporate account and a current account

Depending on the jurisdiction of banking, the corporate account and current are often used interchangeably.

Both accounts are specifically designed for business operations. They are designed to manage day-to-day business transactions. They are designed to manage the financial operations of companies.

Corporate and current accounts are designed to cater to the needs of businesses such as receiving payments from customers, managing cash flow, payments to suppliers and other business-related transactions.

Today, some banks here prefer to call a corporate account a corporate current account such as GT Bank

A corporate account is categorized as SME banking