Does my corporation need its own bank account?

Yes — and it is one of the most important steps to take immediately after incorporating. A corporation is a separate legal entity, and that separation must be reflected in practice, not just on paper.

Mixing personal and corporate funds — called co-mingling — creates accounting nightmares: it becomes impossible to clearly identify business income and expenses, making bookkeeping and tax filing far more difficult and expensive. More seriously, co-mingling is one of the factors courts look at when deciding whether to pierce the corporate veil and hold a shareholder personally liable for corporate debts. If the corporation is treated as just another pocket of the owner's personal money, a court may disregard the corporate structure entirely.

To open a business bank account, Canadian banks typically require a certificate of status or certificate of incorporation, resolution of the board of directors authorizing the account, and personal identification. Some institutions also require a copy of the corporate bylaws or articles.

Keep all corporate money in the corporate account. Pay yourself formally as salary or dividends, documented by proper resolutions. Loans between you and the corporation should also be documented in writing.