A current account is an account that is tailored to meet the requirements of businesses. Current accounts grant businesses the freedom to make multiple transactions and offer features such as higher cash deposit limits, cheque collection services, grouping of accounts, business debit cards, and higher transaction limits on digital platforms. (Business Bank Account)
A current account is essential for businesses as it separates personal and company finances, ensuring financial transparency and compliance. It provides a platform for daily transactions, streamlines financial operations, aids in expense tracking, and facilitates access to business loans and credit.
Read on to find all the information required to open a business account in India.
Eligibility to Open a Business Account or Current Account in India
A current account is accessible to a diverse range of entities. Anyone who satisfies any of the following requirements is eligible to apply:
- Resident individual
- Hindu Undivided Family (H.U.F.)
- Limited company/Limited liability partnership
- Sole proprietorship
- Trust, Associations, Societies, Clubs etc.
Documents Required to Open a Business Account
Find the checklist of documents you need to open a business account in India: –
|Sole Proprietorship||2 documents in the name of the entityProof of address under the entity’s nameProprietor’s photograph, PAN copy, and a copy of one officially valid document (OVD) document|
|Hindu Undivided Family (HUF)||HUF PAN CardKarta’s PAN CardKarta’s OVD documentHUF declarationKYC in the name of HUF as address proof|
|Partnership||Partnership deedsPartnership firm declarationEntity PAN card copyAddress proof in the name of the entityRecent photograph, PAN card copies and OVD copies of partners / authorised signatories / beneficial owners.|
|Limited Liability Partnership (LLP)||LLP agreements since inceptionCertificate of incorporationLLP firm declarationLatest list of designated partnersPAN card copy of the entityAddress proof in the name of the entityRecent photograph, PAN card copies and OVD copies of partners / designated partners / authorised signatories / beneficial owners|
|Company (Public Limited & Private Limited)||Memorandum of association (MOA) & articles of association (AOA)Certificate of incorporationBoard resolutionLatest list of directorsPAN card copyAddress proof in the name of the entityRecent photograph, PAN card copies and OVD copies of partners / designated partners / authorised signatories / beneficial owners|
Please note that for certain industries, banks may ask for proof of the nature of your business. The specific industries requiring this proof may vary, and the list is subject to change. Additionally, the bank may request additional documents to complete the account opening procedure at their discretion.
How to Open a Business Account?
Open your business account by following these steps: –
- Visit the chosen bank branch or apply online.
- Choose from the variety of current accounts your bank offers and complete the account opening application form, providing all necessary documents.
- The bank will verify the documents and provide you with the account details.
A business bank account is crucial for managing your finances efficiently and in a professional manner. To open a business account, ensure you have all the required information and documents, this will help in streamlining the process. By doing so, you will be well on your way to securing the financial foundation of your business.