To conduct smooth business transactions, every company needs a current account. It is the first thing every registered company should do to run smoothly.
A current account is different from a regular savings account. Savings accounts are designed for individuals, not businesses. They also have transaction limits. Current accounts are flexible and don’t have such limits. All startups and businesses open their current accounts once they start their operations. Current accounts don’t earn interest on the deposited sum and they also have comparatively higher maintenance charges. This article takes you through the procedure to open a current account.
Documents required to open a current account
A private limited company doesn’t have to go through many difficulties as compared to its sole proprietor counterparts. Reserve Bank of India (RBI) has led down some KYC rules for private limited companies. These documents are mandatory to open a current account in any bank of India.
– A Certificate of Incorporation
-PAN number of the Account Holder
-Power of Attorney granted to the managers, employees and officers to transact business on their behalf
– Acknowledgement of the Board of Directors to open an account and list of people with the authority to operate it
-Shops and establishments Act Registration document proof
Along with the above-mentioned documents, Some documents may also be needed to be presented before the bank :
-Memorandum of Association and Article of Association
-A list of the current Directors in a designated format
– IDs of all directors/authority figures
-PAN cards of the Director and other Authority figures
– Shareholding patterns of the company in bank format
Once you’re done with these formalities it won’t take long to open your account. Usually, the process is completed in a few days. Banks also provide Debit cards, Internet banking and other facilities to their customers which are the need of the hour in this age of the Internet.
Benefits of a Current Account
– Banks provide a unique facility to take a short term loan to their current account holders. This is not given to savings account holders. It is sometimes interest-free. This service is called overdraft and it is the most sought after service by companies.
– Individual owners can also get current accounts that are registered by businesses. This helps in keeping their personal and professional finances separate. From a tax standpoint, it is very helpful.
– Current Account holders don’t have any deposit limit.
– Current account allows quick business transactions.
– Current Accounts allow Multi-City banking .you can collect cheques at any very convenient branch.