A current account is generally for businesses which carry out a large volume of transactions.
Advantages of a current account for business:
Taking a current account helps plan business finances better. It also helps you analyze is your business is having a profit or loss.
If you separate your accounts, it also helps in organizing your account, helps avoid overspending, and make the tax filing easier.
Opening a current account helps establish business credit which also helps with your creditworthiness.
Here are the documents required to open a current account for your small business:
- PAN card of the business owner
- Aadhaar card or voter ID card of the business owner
- Latest passport size photograph of the business owner or owners
- Electricity bill, bank statement or a rent agreement in your name
- Certificate of Incorporation
Documents for sole proprietorship:
- Documents confirming the name and address which are issued by a Government authority/department
Documents for partnership business:
- Registration certificate of your company
- Partnership deed
- Name of the owners holding more than 15% in the business
- Address proof and identity proof of the partners in the business
- Trade license
Documents for public/private limited companies:
- Memorandum of Association (MoA) and Articles of Association (AOA)
- List of company directors
- List of the owners holding more than 25% in the company
Steps to choose a current account:
1. Minimum balance accounts
Choose an account that will allow you to keep a minimum balance or a zero-balance account because if your bank has a high minimum balance in your account system, it can cause issues for working capital.
2. Know the withdrawal limits
The current account also helps manage cash flow. Most of the current accounts do not have a limit on the number of withdrawals, but a fee could be charged after a limit.
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