Documents required to open bank account of a company :
One of the first steps undertaken after incorporate a private limited company is opening of the current account in the name of the Company. A company can open one or more current account in any bank and is required to transact business. In this article, we look at the procedure for opening private limited company bank or current account along with the documents required.
What is Current account?
Current bank account is opened by businessmen who have a higher number of regular transactions with the bank. It includes deposits, withdrawals, and contra transactions. It is also known as Demand Deposit Account.
Current account can be opened in co-operative bank and commercial bank. In current account, amount can be deposited and withdrawn at any time without giving any notice. It is also suitable for making payments to creditors by using cheques. Cheques received from customers can be deposited in this account for collection.
Generally, current account holders do not get any interest on their balance lying in current account with the bank.
Current account holder get one important advantage of overdraft facility.
Features of Current account
The main features of Current account are as follows:
- Current bank accounts are operated to run a business.
- It is a non-interest bearing bank account.
- It needs a higher minimum balance to be maintained as compared to the savings account.
- Penalty is charged if minimum balance is not maintained in the current account.
- It charges interest on the short-term funds borrowed from the bank.
- It is of a continuing nature as there is no fixed period to hold a current account.
- Banker requires KYC (Know your Customers) norms to be completed before opening a current account.
- The main objective of current bank account is to enable the businessmen to conduct their business transactions smoothly.
- There is no restriction on the number and amount of deposits.
- There is also no restriction on the number and amount of withdrawals made, as long as the current account holder has funds in his bank account.
- Generally, bank does not pay any interest on current account. Nowadays, some banks do pay interest on current accounts.
Benefits of a Current account
There are some benefits of opening a current account of a company:
- Easy withdrawal facility to deal with cash transactions.
- Deposit cash or cheque at any branch of the bank makes it convenient to collect payments.
- Over drafting money is available for account holders in a current account.
- Separate cheque balance to be used every month.
- Get a cheque book every month at no charge to make payments to vendors without hassle.
- SMS updates of every transaction and bank balance.
Documents required for opening Current account
Based on the RBI KYC norms, various banks have formulated procedures and list of documents required to open a company current account. The following is an extensive list of documents mandatory for opening a current account in the name of a company:
- Certificate of Incorporation
- Memorandum of Association (MOA)
- Article of Association (AOA)
- Board Resolution to identify the authorized board member
- List of directors
- Address proof of registered office address
- Director’s identity proof and authorized signatories
- Pan Card
- Aadhar Card
- Voter Identity Card
- Driving License
- Senior Citizen card issued by central or state government
- Proof of appointment of directors (in case of any changes in the Board of Directors)
- Proof of resignation of directors (in case of any changes in the Board of Directors)
- Shareholding pattern of the company
- PAN Card of the company or PAN Card Application Acknowledgement
All the enterprises have to open a bank account necessarily in the name of the business after starting the private limited company. This account establishes your reliability in the marketplace. It is not compulsory. In this article, we get to know about the procedure for opening private limited company bank or current account with the documents required. If you have any doubt regarding this, you can contact company suggestion.