At the end of the day, banks want to make sure the bank accounts they open on behalf of their customers are operating legally.
This means, if you want a business account for a company you own, banks will want to verify the company is properly formed and the paperwork is complete. Banks will also want to verify the company with the state’s secretary of state.
If a bank believes you are “conducting or transacting business” in your state of residence, the bank will want to see the company is actually registered with the state.
This can be a problem in many states, where you may want to remain “anonymous” (i.e. your personal information is not identified on the Internet, when someone looks up the company). What we typically recommend, is a parent/child structure to permit you to operate legally in your state, but maintain your identity. Read our other knowledge base article on this topic.
DO NOT form a “foreign LLC” in your home state. This will destroy your anonymity.
The proper solution is to either form the parent/child structure discussed above, or to convince the bank that your company is either (i) not operating in the state at all, or (ii) is a holding company, not an operating company.
This can be difficult, because you may be operating in your state (by law) even if you don’t think you are (in practicality). Also, if you’re opening up a bank account, that sort of implies you’re moving money around, and that’s typically what operating companies do, versus holding companies.
Our advise is to try with a few different banks, and if all the banks universally agree that you are conducting business in the state, to bite-the-bullet (so to speak) and form the parent/child structure.