For businesses venturing into the digital asset space, setting up exchanges under a company name is a crucial step towards aligning investments with business objectives. The process, while seemingly daunting, can be streamlined with the right approach. Here's a guide to setting up your business account on cryptocurrency exchanges, based on insights shared by Tanner.
The good news for businesses is that practically any exchange can accommodate your company, provided you set up the account as a business account. This setup is essential for distinguishing between personal and business-related transactions, especially for tax purposes.
When filing taxes, clearly marking which accounts are personal and which are designated for business use is essential. This distinction ensures that transactions are appropriately categorised and accounted for.
While the process might vary across platforms, setting up a business account often involves indicating your company's name during the registration process. For example, Uphold offers the option to create a business account, though it might entail a more tedious setup process. On the other hand, platforms like Caleb and Brown streamline the process to as simple as providing your first name, last name, and optionally adding your company's name.
When preparing documents for your accountant, clarity on which exchanges are used for business transactions is key. This clarity simplifies the accounting process, ensuring that business assets are accurately reflected in your tax filings.
Despite the absence of a clear "set up a business account" option on some exchanges, there are workarounds:
If necessary, initiate a new account specifically designated as your business account.
Perform a transaction from your personal to your business account to clearly earmark the funds as business-related.
Prepare a letter or document that records the transaction between accounts, specifying one as personal and the other as business. This document acts as a formal record of the asset transfer for accounting purposes.
To aid in this process, a template will be provided to help you craft a letter of sale. This letter serves as an official record, documenting the transfer of assets from a personal to a business account, ensuring clear separation and proper accounting of business investments in digital assets.
Establishing a company presence on cryptocurrency exchanges is a straightforward process with proper preparation and documentation. By clearly distinguishing between personal and business accounts and utilising available tools and templates, businesses can seamlessly integrate digital asset transactions into their financial systems, ensuring compliance and clarity in their investment activities.
