Last updated: January 30th, 2023 5:21 PM

How to open a current account for a Private Limited Company?

Private Limited Company is a popular type entity that is governed under the Ministry of Corporate Affairs. A Private Limited Company is a form of business that is privately held business in which are shares of the company are prohibited from being traded publicly. The Companies Act, 2013 states that a Private Limited Company should have a minimum of 2 members which can go up to 200. A Private Limited Company can be registered in seven working days. When the company gets registered the next step is to a Bank account in the name of the Company. A regular savings account cannot be used by businesses. A current account has to be opened to avoid transaction limits. All the entrepreneurs open their current bank account as soon as they start their business. There is no interest for the current bank accounts unlike the savings accounts, recurring deposits. Here we will look at the procedure to open a current account. Documents required Getting a Current Bank Account for a Private Limited Company is easy in comparison to a Sole proprietor. Here is the list of documents required for opening a Current Bank Account:

• Incorporation Certificate
• Resolution of the Board of Directors to open the account and the identification of those who have the authority to operate the account.
• One Identity proof from the Customer: PAN Card, Passport, Voter Identity Card, Driving License, Aadhar Card.
• One Address proof from the Customer: Passport, Voter Identity Card, Driving License, Aadhar Card.
• Recent Colour Photograph
• Accounting opening cheque from the existing savings/ individual current account

However, the following documents may be required to be presented to the bank:

• Memorandum of Associations (MOA) and Articles of Associations (AOA)
• Identity proof of all the Directors/ Authorized Signatories
• PAN Card of the Directors

With current bank account banks also typically offer debit cards, mobile banking, and net banking facilities. The duration to open a Current Bank account will depend on the type of entity and submission of documents. What are the benefits of getting a current bank account? Overdraft Facility- Current Bank accounts have easy access to the Overdraft facility. Overdraft is a short-term loan on which the bank may or may not charge the interest. Sole proprietors also use current accounts, as the current accounts help the entrepreneurs to keep their personal and the company finances separate. This is advantageous from the tax point of view. Also as the account is in the name of the company it adds to the company's credibility.