Why Banks Often Scrutinise New GmbHs More Closely, and How to Prepare
The GmbH has been formed, but when opening the business account the bank asks for further documents and questions about the company. This can feel tedious, but it is normal for new companies.
Banks must check the company, its representatives and the beneficial owners. With complete documents and clear details, the process can usually be made much easier.
Table of contents
At a glance
- Banks must identify and check new companies and the persons involved in accordance with statutory requirements.
- Frequently required are, among other things, the articles of association, commercial register extract, shareholder list and identity documents.
- The bank may additionally request details of the business activity, expected payments and beneficial owners.
- With foreign shareholders or complex ownership structures, the check can take more time and require additional documents.
- Incomplete or contradictory details often lead to queries and delays.
- A bank can refuse to open an account after its own risk assessment. There is no general entitlement of a GmbH to a business account.
Why banks scrutinise new GmbHs more closely
Banks are legally obliged to check every new customer. The basis is the German Money Laundering Act (GwG). For corporations, this check is more intensive, because a newly formed GmbH has no account history yet that the bank could rely on. Background on the law is available from BaFin. Important to understand: this is not distrust of you personally, but a prescribed process.
Why the bank is not working against you
Many founders perceive the bank’s questions as distrust or as a sign that something is wrong with their company. The opposite is true. The bank is fulfilling statutory obligations that apply to every new customer, and it has its own interest in taking you on as a customer quickly. The more complete your documents are and the more clearly you answer the questions, the sooner the check is completed. So see the queries less as a hurdle and more as a checklist you work through together with the bank.
Which documents banks typically require
If you have these documents ready from the start, you save yourself queries:
- current commercial register extract, no older than three months
- articles of association or notarised statutes
- current shareholder list from the commercial register
- identity card or passport of all shareholders and managing directors
- proof of payment of the share capital, depending on the bank
- brief description of your planned business activity
- additional identification documents for foreign shareholders
Ask for a certified copy of the articles of association directly after the notary appointment. This document speeds up the account opening considerably, because banks accept it as initial proof even before the final commercial register extract is available.
Common bank queries, and how to answer them confidently
You should be prepared for these questions:
- “What exactly does your company do?” Answer briefly and clearly on the basis of your company purpose.
- “Where do the shareholders come from?” Have identity documents and, where applicable, proof of address ready.
- “Who is the beneficial owner?” These are shareholders holding more than 25 percent. An entry in the transparency register helps here.
- “Are there connections abroad?” Answer honestly and clearly; good preparation saves queries.
Special considerations with foreign shareholders
With shareholders from abroad, banks check particularly carefully, known as enhanced due diligence. Certified translations and sometimes apostilled documents are often required. Allow two to four weeks more time than for purely German companies.
With foreign shareholders, talk to the notary early. Some documents can be prepared as part of the notary appointment. What this looks like at notarisation is shown in the article What to consider with foreign shareholders or managing directors.
Why accounts are sometimes refused
A refusal feels frustrating, but usually has understandable reasons:
- an unclear or very broad company purpose, such as “trade in all permissible goods”
- incomplete documents
- missing or unclear beneficial owners
- an industry with a higher risk profile, such as crypto or cash-based trading
What helps then: simply try another bank. Online banks often have fewer bureaucratic hurdles for new GmbHs.
If a bank refuses the account without a specific reason: don’t be discouraged. Sometimes the industry simply does not fit the risk profile of that one bank. Another bank often has no problem with it.
Online bank or branch bank: what suits the start?
Both have their place, depending on what you need:
- Branch banks generally offer more services and personal advice on site, but often take a little longer to check.
- Specialised online banks and fintech providers are usually opened faster and require fewer documents.
For the first months, an online bank can be ideal for becoming operational quickly. In the long term, a branch bank is often worthwhile in addition for larger transactions and credit lines. The article on opening a business bank account helps with the choice.
When you should open the account
Ideally directly after entry in the commercial register, when the commercial register extract is available. One exception is paying in the share capital: for this you need a special deposit account before registration. How this works is explained in the article on paying in share capital. The sooner the account is set up, the sooner you can issue invoices and receive payments.
With foreign shareholders, please allow four to six weeks for opening the account. Not because anything is difficult, but because the identity checks simply take time. Anyone who factors this in from the start does not come under pressure.
Don’t worry: almost every GmbH gets an account
Banks check new GmbHs not because they distrust founders, but because they are legally obliged to. Almost all new companies get an account; sometimes it takes a little patience. Having the documents complete and answering the bank’s questions clearly shortens the process considerably.
More from the series: the notary appointment
Arrange a notary appointment
Unsure whether your company purpose or your documents will satisfy the bank? Clarify it before opening the account. Book an appointment, often available within a few working days.
Frequently asked questions about banks and business accounts
Usually directly after entry in the commercial register, because you can then present the extract. For paying in the share capital, there is a special deposit account even before registration.
The articles of association show the bank who runs the company, who owns it and what it does. This is part of the statutory duty to check and helps to classify you clearly as a customer.
This is any natural person who holds more than 25 percent of the company or controls it. The bank must know this person for the purposes of money laundering prevention.
Yes, this can happen if your industry does not fit that bank’s risk profile. It is not a judgement on you. Another bank will then usually open the account without any problems.
An online bank is often suitable for a quick start. For larger transactions and credit lines, a branch bank makes sense in the long term. Many founders combine both.
Then the bank checks particularly carefully and often requires certified or apostilled documents. Allow more time and talk to the notary early.
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Start the account opening with the right documents
Clearly worded articles of association and complete documents often determine how quickly your business account is set up. Notary Franke ensures at notarisation that your documents are bank-ready and supports you with any queries.
