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Bank account requirement for C Corp

Hello,

We have set up a company in Delaware and we have a bank account in Silicon Valley Bank. We have no income, no expenses and no employees.

The sole purpose of the company is distribution of intellectual rights. We transfer rights to our product to the company and then divde shares.

The questions is: do we need a bank account? I have spoken with a few accountats and lawers from top companies in the U.S., but nobody was 100% sure.

1. In theory, there's no legal requirement to have a bank account opened.
2. In practice, a bank account is required when paying federal income tax.

However, we have nothing to pay - we only need to report 0 income. Can we close our bank account in that case?

Thanks,
Jacek

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

There is no requirement to have a bank account, but you WILL have expenses.

DE charges a yearly fee.
If you are doing business in another state, you'll have a Foreign entity fee.

So, unless you pay it out of another company and use an intercompany account, your claim of $0 income and associated $0 in cash transactions is incorrect.

Jacek Strupinski
Title: CEO
Company: Sinup, Co., Inc.
(CEO, Sinup, Co., Inc.) |

Well, we only transfer small amounts of money to our account as Owner's Equity. We use it to pay SVB maintenance fee and Delaware Franchise Tax.

I was told by an accounting company that we do not have to pay taxes from this money transfers and they does not count as income.

Basically, we are not doing any business yet, so should we report income and pay taxes only in order to pay franchise tax? :)

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

You still need to file Tax Returns and you'll have carry-forward losses.

My suggestion is hire a reputable accounting firm and review you company and its tax liabilities, if any.

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