The sole proprietor is an individual owner of a business or contract. He/ She are liable to pay liability of the proprietorship as personal liability and also pay income tax on personal income earned through business. As such many businessmen do business or trade on their personal name as separate business name is not necessary. Procedures for opening Current account for both individuals and sole proprietary firms are same. KYC formalities like identity proof and address proof with introductions are common requirement for opening account. Further while opening current account banks generally insist for proof of business activities such as VAT/GST registration, Municipal shop and establishment licence, Sales tax registration etc.
The KYC documents obtained by banks for Proprietary concerns accounts are;
1.Identity and address proof of the proprietor with Telephone/Fax Number/email address,
2.Any two of the below documents would suffice. These documents should be in the name of the proprietary concern.
3.If the firm is in the business of import & export, IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT
4.Licence/certificate of practice issued in the name of the proprietary concern by any professional body incorporated under a statute.
5.Proof of the legal name of the firm such as Business Registration certificate, Shops & Establishments Registration certificate, or Factory Registration certificate or GST Tax Registration etc.
6. GST/Sales and income tax returns
While opening opening Current Accounts of all categories of depositors including proprietor, partners, trustees, settlers, beneficiaries and those holding power of attorney, founders, managers, directors etc.the customers needs to submit ‘know your customer’ related official valid documents of the entities and natural persons behind the entities. As per RBI guidelines, in addition to seeking NOC from the existing bankers of the prospective current account customer, banks should seek information from CRILC and verify the data received from the CRILC, whether the prospective customer is enjoying credit facilities from another bank. Also, banks have to seek ‘No Objection certificate’ from the drawee bank where the initial deposit to current account is made by way of a cheque.In addition to KYC related documents, other common procedure for opening new current accounts are published in this website, let us now examine, what are the other requirements for opening captioned accounts.