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The Banks - Business Bank Account for Corporation - Canada

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RE: Business Bank Account for Corporation

Postby footloose » Fri Mar 04, 2011 07:10:05 PM

Here's the problem.

Every time that you apply at a bank or a credit union to open a personal savings or chequing account, a personal current ( business ) account or a corporate business account, the bank or credit union will automatically pull a Credit Report. You have made an application to open an account and the bank has to decide whether to accept or decline you as a customer. If the bank believes or suspects that you represent a potential problem to them, such as issuing NSF cheques, running constant overdrafts or laundering ill-gotten gains through your account, they will simply decline your application.

In the case of "rb-n-ma", the fact that you have been out of Canada for over 10 years indicates that you have NO Credit Record which is even worse than having a poor Credit Record. A bank or credit union has absolutely no information about your past credit history. You may currently enjoy an excellent Credit Record with a Credit Score of 800+
but unfortunately the banks and credit unions do not have access to that information because Credit Reports and Credit Scores do not cross international boundaries. That is why so many immigrants to Canada have such great difficulty in establishing credit unless they first acquire a Secured Credit Card for which they make a deposit and in many cases, in return, receive a credit card for a credit limit equal to their deposit. Companies such as Capital One offer this service as well as some banks. People who are declined bank accounts are now using cheque-cashing services and Payday Loan companies such as Money Mart to fill this void.

Pursuant to the Federal Bank Act, if you are in possession of a cheque that was issued by the Government of Canada, all banks must honour these cheques regardless of whether you have an account at that bank ( not necessarily at that branch ) or whether you can produce identification satisfactory to the bank and the bank is forbidden to charge any fees for this service. If it turns out that this cheque was stolen or fraudulently duplicated, the bank's losses will be covered by the Government of Canada. The same does not apply to credit unions because they are under provincial/territorial legislation.

If you are in possession of a cheque issued by a province or territory, the bank or credit union has the option to decline to honour this cheque because any losses suffered by a financial institution are not covered by the respective provincial/territorial government.

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Educating one Consumer at a time
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RE: Business Bank Account for Corporation

Postby rb-n-ma » Fri Mar 04, 2011 10:17:53 AM

I am in the same satiation, well almost. I actually reside in the USA (I'm a Canadian), I formed a Canadian Corp in dec 2010, because I am planning to come back at some point. However, I have tried to open a business account with a couple banks and have been denied without a reason!!!

My first pick was HSBC (they Suck) since the are "global", I have (had,in process of closing) a US personal account with them, and mostly because they offer a FREE account.. They told me that it shouldn't be a problem that I reside in the US. They said they would use my US credit history since I have been out of Canada for over 10 years. Anyway I have good US credit, yet they denied my request, and they did not provide a reason???

Now I remember why I left Canada in the first place !! The banks or any other corporate entity do not have to answer to the consumers and there is no recourse! Truly sad really.

Although I know the effort is futile, I have filed a formal complaint; which will, not doubt, reach the Ombudsman, and then just disappear.

It really is wrong when a country stifles competition AND doesn't provide the consumer with any REAL protection.

What I really don't understand is that I wasn't asking for a loan or overdraft. I just need an #$#%@#$ account.

- pissed off, expat RB
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RE: Business Bank Account for Corporation

Postby Ottawa_Chap » Wed Nov 24, 2010 05:35:41 PM

Can't answer your question, sorry. Can however tell you that although I don't have a clue what my credit score is/was, I am carrying over 100k in defaulted debt (3 yrs) and that was showing on my report at the time I made the application.
Infuriating one C/A at a time..
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RE: Business Bank Account for Corporation

Postby namewithheld » Wed Nov 24, 2010 04:48:42 PM

Was in the same boat as you, then went to TD...

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That's interesting. Does TD have a more lenient policy than some of the other banks?

I actually had a business account with them, then closed it because of the fees. Now I'm afraid to go back and try and open a new one with them. Because having a list of newly rejected applications on my credit report isn't going to help things at all.

How bad does your personal score have to be for them to reject your business application?
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RE: Business Bank Account for Corporation

Postby Ottawa_Chap » Wed Nov 24, 2010 04:22:12 PM

Was in the same boat as you, then went to TD and opened an account for my business (incorporated). TD approved me, which was surprising considering I owe them ~25k.
Infuriating one C/A at a time..
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RE: Business Bank Account for Corporation

Postby namewithheld » Wed Nov 24, 2010 03:22:04 PM

Does it matter which bank? They're all the same. I tried one. If I keep going down the list, each application will go on my credit report. They will all demand a credit check and reject my application. Each rejection will dig my grave further.
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RE: Business Bank Account for Corporation

Postby average_joe » Wed Nov 24, 2010 03:12:26 PM

Which major bank refused to open an account for you? Did you try a credit union?
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Business Bank Account for Corporation

Postby namewithheld » Wed Nov 24, 2010 02:40:41 PM

I have a bad credit rating. I want to start a business so I can make money and pay my bills. But I can't get paid, because the banks won't open a business bank account for my corporation. They won't tell me why, but it's obviously because of my personal credit rating.

When I learned my credit rating had been destroyed, I opened a corporation so I could have a brand new credit rating. I have been led to believe since high school that corporations are legally separate entities which are not liable for any of your personal debts, liabilities, or anything else. In real life, though, the banks don't recognize this. When you go to a bank to open an account for the corporation, they force you to include your personal SIN and financial information, so they can look up your credit rating. Then, they turn the corporation down based upon your personal history. That's not the way I thought it worked, but that's what they do.

The banks also tell you if you wait two years, your corporation can have its own credit rating. So I waited for two years, then went to a different bank to open an account. This bank also made me include my personal financial info, forced me to permit a personal credit check, and rejected the application. So the banks are lying.

So now I have this useless 2-year old corporation which I cannot use to run my business. I cannot earn money if I cannot open a business bank account and use that to sign up for a merchant account with a payments processor.

Don't tell me to use PayPal. PayPal is what destroyed my credit rating. It is an evil company.

After reading this, does anyone know how or if I can open a business bank account for my corporation?
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