People who just start to set up a new company,might still be confused with the significance of having a company bank account instead of using your personal ones.
Here I would like to introduce you with the difference between a company account and a personal one,moreover,its function and meaning!
Significance
The biggest difference in essence between company accounts and personal accounts is that the company account is used to operate the entire company's economic activities, and the personal account is the one that we usually have access to.Opening a new company must open a company account,because the company's capital operation must be in accordance with the rules and regulations and vouchers for every transaction must be presented for the company accounting.
Crucial Difference:Bank Vouchers Kept For Accounting
To use the company account,you just need to put all your usual sales revenues or expenses through its basic account.Expenses include employee salaries,your petty cash,travel expenses,purchase orders for goods,and so on.
These expenses you need to draw by checks,which are classified into cash checks and transferred checks.While the wages,petty cash,travel expenses are drawn by cash checks,the payment of goods would be drawn by transferred checks.It means that once your company has an economic activity,your money will be done through the company's basic bank account.
That means,unless you have reasonable causes or company proof,money deposited in the company account could not be withdrawn or transferred to personal accounts freely.
With money transferred or withdrawn from company account to personal accounts,it could only be achieved in the form of related business operations such as wage payment,company assets purchase,goods payment,rent payment,water,electricity bills or any other expenses.
Consequences of Misuse of Company Account
As a director and shareholder of a company,you must have a clear distinction from the company's capital operation to your personal ones.Failure to utilize company funds correctly would end up with tax penalties and legal responsibilities.
As the tax bureau would check on your accounting books to see whether your capital operations are up to the the rules and regulations.
Other Differences
Besides the essential difference mentioned above,the company account still have a variety of differences from the personal account in the following ways:
1 The main body of the company account is the company,while the one of personal account is natural person.
2 The approval authority for the company account is the People's Bank of China(the supervision unit for all commercial banks),while the one for personal account is delegated to the commercial bank.
3 The certificate carrier for the company account is "Bank Account Opening License", which provides information such as company's name,company account number,company director,and account-opening bank;while the one for personal account is usually a bank card or bankbook.
4 The cash withdrawal limit of the company account is strictly limited;while there is no restriction on the amount of cash withdrawals from personal account.
5 When withdrawing money from the company account,you would need to present the company's financial seal and personal seal;while personal account is debited with a password.
If you need help, you can contact:
Contact Person：Ceci Wu
Hongkong Dada Enterprise Services Limited
Mobile: +8613544546834
Wechat: 13544546834
Telephone: 86-020-28071843
Email: dadaceciwu@hotmail.com
Website: www.dada-hongkong.com www.dada-hongkong.net
Address：Room 2501, South Tower, World Trade Centre, 371-375 Huanshidong Road, Yuexiu District, Guangzhou, China (Line 5, Taojin Metro Station, Exit B)
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