Procedure for opening a bank account for Sole Proprietorship

Individuals’ doing business as a sole proprietorship can open a current bank account for their business finances by submitting their GST Certificate/trade license/TIN no. Along with other required documents to the bank.

Can a person open a bank account for his proprietorship?

It is often said that a person should keep his personal and professional life apart. Similarly, the person should have a different bank account for his business activities. Proprietorships are business entities that are not registered with the central government. Individuals running such proprietorships can open a current bank account which will strictly be associated with business purposes.

Is it mandatory to open a current bank account for a proprietorship firm?

It is not mandatory to open a current account for your business, but it is beneficial than a savings account. In India, there are many benefits given to a current account holder regarding a savings account holder. As current accounts are designed for business entities with benefits like overdraft limit, no limitation on cash withdrawal, same day check submission and many more.

What are the necessary documents required for opening a bank account?

To open a current bank account, you need to submit various documents from the required category:

Entity Proofs

You need to present at least one of these documents to open a current bank account for your business.

  • Goods and Service Tax (GST) registration certificate: this certificate is issued by the central excise and custom board department to individuals to avail the service tax registration certificate in the starting of their businesses to open a current bank account in their Firm Name.
  • Valid shop act license/ trade license: it is issued by a local municipal party and is required by the trading business where they have a physical shop.
  • Latest income tax returns: your income tax returns are filed in the name of the sole proprietorship firm can be used
  • VAT/ST returns: you can use your old TIN Number or ST Number for opening the current bank account
  • Latest Property Tax Payment or Utility Bills Copy: if you have tax payment receipts or Copy on the Legal Entities Name then you can use them for the current bank account

Personal ID proof and address proof

You need to submit these documents that will be used as your identity and address proof.

  • Adhaar card
  • PAN card
  • Registered office proof
  • Voter ID/ driving license/ passport
  • Utility bills for the last three months

After submitting all the documents to the bank, you need to make an initial payment of INR 5000 to INR 25000 depending on the bank you have chosen.

Related Articles

Search Companies