How to Open a Current Account for a Private Limited Company?

Ashish M. Shaji

20 Oct, 2020

Every Private Limited Company needs to do a few things after incorporation. Opening a bank account is one of those few steps. Let’s have look at the procedure and documents required to open a current account for Private Limited Company.

After Company Registration, a Private Limited Company needs to open a current account in the name of the company. Once a company gets its PAN number it can apply to open an account in a bank.

Benefits of opening a Current Account

• It allows the current account holder to get an overdraft facility;
• There is no restriction on minimum transactions for current account holder;
• Current account helps in organizing business transactions and helps in the taxation process;
• With current account, one can get credit card transactions tools and online banking support.

The opening of a Current Account for Private Limited Company

The opening of a current account for a private limited company is really easy. Being a legal entity and complying with all the provisions of law makes it convenient for the companies to get a current account opened with any bank. To open a bank account, the company needs to provide all the documents required by the bank. The Reserve Bank of India has issued KYC norms, which prescribes certain documents to be submitted to the bank in order to open a current account with any bank.

As per the KYC norms^[1], the following documents are required to be submitted to the bank:

• Memorandum of Association, Articles of Association and Certificate of Incorporation;
• A certified true copy of board resolution to open a bank account and identity of the person authorized to operate the bank account;
• Power of attorney authorizing any officer, employee, etc. to transact business on its behalf;
• Copy of PAN;
• Copy of telephone bill.

Documents Required by Banks to Open a Current Account in the Name of Company

As per RBI’s KYC norms and other requirements, various banks require various documents for opening a current account.

The following are the documents required to open a current account in the name of the private limited company:

• Certificate of Incorporation
• MOA & AOA
• A certified true copy of board resolution for opening bank account
• List of Directors’ as per bank’s format
• Copy of address proof of registered office of the company (If the address of the registered office is different from the one given in Certificate of Incorporation)
• Identity proof of all directors and authorized signatories:

• PAN Card
• Aadhaar card
• Voter Identity Card
• Passport
• Driving license
• Arms License
• Senior citizen card issued by the state government or central government
• Fisherman identity card issued by the state government or central government
• Shareholding pattern as per bank’s format
• PAN card of company or PAN card application acknowledgment copy(for companies which are incorporated within 90 days of application for the opening of a bank account)
• Proof of appointment of the current director(s) in the case of a change in the board.
• Proof of resignation of the director(s) in the case of a change in the board.

Conclusion

Current account is a bank account for business which allows entrepreneurs to run their business effectively. The rules prescribed by the Reserve Bank must be strictly adhered to while opening the current account.

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