{"id":973,"date":"2016-04-20T18:15:57","date_gmt":"2016-04-20T12:45:57","guid":{"rendered":"http:\/\/easybankingtips.com\/?p=973"},"modified":"2023-08-11T10:56:50","modified_gmt":"2023-08-11T05:26:50","slug":"sole-proprietorship-current-account","status":"publish","type":"post","link":"https:\/\/easybankingtips.com\/sole-proprietorship-current-account\/","title":{"rendered":"How to Open Sole Proprietorship Current Account in India?"},"content":{"rendered":"<p>Sole proprietor means sole owner of a business. Whatever is the nature of business, whether it\u2019s a shop, freelancing job, or taxi drivers agency, if there is only one person who owns the business and handles or manages all the activities including profit, loss and even taxes, such a business entity is called Sole proprietorship firm. A bank account (essentially current account) opened in the name of these firms are known as &#8216;sole proprietorship current account&#8217;.<\/p>\n<p>Here, there is no legal distinction between the owner and the business because they both represent each other.<\/p>\n<p>Opening of current account for sole proprietorship firm or company is important because, it gets you a better control over your financial activities originating from your business. It also lets you carry out financial transaction\u00a0more frequently without much constraints.<\/p>\n<p>Sole proprietorship current account can be opened either in the name of the owner or in the name of the business. But before you approach a bank, make sure you have chosen the right one. There are a few things you\u00a0must consider about a bank before opening the account.<\/p>\n<ul>\n<li><strong>Accessibility of bank<\/strong>: Carrying out financial activities such as withdrawals, deposits, NEFT,cheque payments etc is\u00a0much easier when a bank is easily accessible to you. You can reach the bank physically, in case you have any queries. However, lack of accessibility is not that much of a problem when you have phone banking and internet banking facility for the account.<\/li>\n<li><strong>Services offered<\/strong>: Make a list of your banking needs\u00a0such as how frequently would you need services like NEFT, cheque encashment, or issue of demand drafts etc.. Discuss it with the banker as of how they can accommodate your requirements and what charges do they have for this.<\/li>\n<li><strong>Banking on digital platforms<\/strong>: In the era of digital transformation, banking is at your fingertips; provided you have a sound knowledge of technology and the bank offers a user-friendly internet banking and mobile banking facility. If it has a mobile application, then there&#8217;s a lot of convenience to\u00a0manage your financial activities.<\/li>\n<li><strong>Charges<\/strong>: Keep all necessary information regarding the minimum balance required for sole proprietorship current account, penalty of non-maintenance of minimum balance, charges for SMS alert, ATM withdrawals, issue of cheque books etc..<\/li>\n<\/ul>\n<h2>Documents Required for Sole Proprietorship Current Account<\/h2>\n<p>As per the KYC norms, banks have to ensure that the entity has provided all the necessary documents to authenticate their identity, address, and line of business.<\/p>\n<p>So, for a simple understanding, let\u2019s classify the documents in\u00a0two\u00a0categories.<\/p>\n<p><strong>Documents that Authenticate Your Business<\/strong><\/p>\n<p>These documents are basically in the name of the business or proprietary concern, bearing the details of address and nature of business. depending on the requirement, you can be asked for any two of the following.<\/p>\n<ul>\n<li>Service tax registration certificate ( if the annual turnover crosses 10 lacs)<\/li>\n<li>TAN certificate<\/li>\n<li>TIN documents issued by state\u2019s commercial tax department<\/li>\n<li>Certificate or licence issued by the Municipal authorities under Shop &amp; Establishment Act<\/li>\n<li>VAT and CST registration<\/li>\n<li>Sales and income tax return<\/li>\n<li>Registration documents issued by Sales Tax\/Service Tax\/Professional Tax authorities<\/li>\n<li>Export or Import license<\/li>\n<li>Licence issued by the Registering authorities like Certificate of Practice issued by Institute of Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian Medical Council, Food and Drug Control Authorities, etc<\/li>\n<li>Shop establishment documents<\/li>\n<li>Utility bills such as telephone bills, electricity bill, water bill in the name of business entity<\/li>\n<\/ul>\n<p><strong>Documents that Authenticate Sole Proprietor\u2019s Identity and Address ( Any one of these)<\/strong><\/p>\n<ul>\n<li>PAN is Mandatory for opening a current account<\/li>\n<li>Voter\u2019s card<\/li>\n<li>Driving License<\/li>\n<li>Passport<\/li>\n<li>Adhaar card issued by UIDAI<\/li>\n<li>Any identification letter issued by state or central or local authority can be taken subject to banker\u2019s satisfaction.<\/li>\n<\/ul>\n<p>To authenticate the address, any identity proof that carry the address can be taken. Otherwise, a\u00a0letter can be issued by public authority but again that would be subject to bank\u2019s satisfaction. Utility bills not more than 3 months old, in the name of sole proprietor can also be submitted.<\/p>\n<h2>What Else is Required For\u00a0Sole Proprietorship Current Account?<\/h2>\n<p>Seals or rubber stamps are in fact, a way of confirming your ownership of something. Hence, these are absolutely necessary while opening a current account in the name of business.<\/p>\n<p>Usually, there are two types of rubber stamps, a sole proprietorship bank account requires if\u00a0it&#8217;s created in the name of business, firm, or store. One is\u00a0a round business seal with business name and registration no. engraved on it and the other is usually a rectangular seal, which is used with\u00a0the signature of the sole proprietor.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-1180\" src=\"http:\/\/easybankingtips.com\/wp-content\/uploads\/2016\/04\/Sole-proprietor-round-seal-1.jpg\" alt=\"Sole proprietor seal examples\" width=\"498\" height=\"150\" srcset=\"https:\/\/easybankingtips.com\/wp-content\/uploads\/2016\/04\/Sole-proprietor-round-seal-1.jpg 498w, https:\/\/easybankingtips.com\/wp-content\/uploads\/2016\/04\/Sole-proprietor-round-seal-1-300x90.jpg 300w\" sizes=\"(max-width: 498px) 100vw, 498px\" \/><\/p>\n<p>At the time of account opening, the\u00a0application and due diligence forms are to be stamped with the seals. However, it&#8217;s the\u00a0impression of the\u00a0second seal along with your signature, that becomes your identity and are scanned and stored in bank&#8217;s database for identification purpose.<\/p>\n<p>So, you need to get the seals ready before opening the sole proprietorship current account.<\/p>\n<h2>How to Apply?<\/h2>\n<p>Every bank has their own application and due diligence forms. You can either download it from their websites or obtain it from the branch office.<\/p>\n<p>Before you open the account, it\u2019s always advisable to have a discussion with the banker regarding your business activities and transaction requirements. They are\u00a0the best persons to tell you what documents the bank\u2019s going to need based on your line of business.<\/p>\n<p>Take the required documents along with PAN card, passport\/stamp size photographs, and others if any. Fill the forms and submit it with photographs affixed on the appropriate boxes and documents attached. Sign on them duly.<\/p>\n<p>After the completion of KYC, you will be required to deposit the initial amount which can vary from bank to bank.<\/p>\n<p>Now that your part is over, you might have to wait for a couple of days to have your account details, check book, and debit cards. Don&#8217;t forget to maintain the minimum required balance to avoid the charges. Don&#8217;t hesitate to ask the banker if you have any questions related to the account operation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sole proprietor means sole owner of a business. Whatever<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[27],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to Open Sole Proprietorship Current Account<\/title>\n<meta name=\"description\" content=\"Sole Proprietorship Current Account: Do you own a business? 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