Opening Private Limited Company Bank Account

One of the first steps undertaken after incorporating a private limited company is opening of the current account in the name of the Company. A company can open one or more current account in any bank and is required to transact business. In this article, we look at the procedure for opening private limited company bank or current account along with the documents required.

Current Account for Private Limited Company

Opening a current account for a private limited company is easier than opening a current account for a sole proprietorship firm, as a company is a registered legal entity - by law. Therefore, once a company is incorporated, a bank account can be opened in the name of the business with just a few documents, unlike proprietorship - wherein the existence of the sole proprietorship must be established through various tax registrations. As per the Reserve Bank of India's KYC norms, the following are the documents necessary to open a current account in the name of the Company:

• Certificate of incorporation and Memorandum & Articles of Association;
• Resolution of the Board of Directors to open an account and identification of those who have authority to operate the account;
• Power of Attorney granted to its managers, officers or employees to transact business on its behalf (if applicable);
• Copy of PAN allotment letter;
• Copy of the telephone bill;

Documents Required for Opening Company Current Account

Based on the above RBI KYC norms, various banks have formulated procedures and list of documents required to open a company current account. The following is an extensive list of documents mandatory for opening a current account in the name of the Company:

• Certificate of Incorporation of Company
• Board resolution for opening a current account
• Memorandum of Association (MOA) & Articles of Association (AOA)
• Latest list of Directors as per the bank’s format
• Registered office address proof of the company (Only required if different from the address mentioned in the Certificate of Incorporation)
• Identity proof of all Directors / Authorized Signatories
  • PAN card of Director
  • Passport
  • Voter Identity Card
  • Driving License
  • Aadhaar card issued by Unique Identification Authority of India (UIDAI)
  • Senior Citizen Card issued by State/Central Govt
  • Fisherman Identity card issued by State/Central Government
  • Arms License
• Proof of appointment of current director/s (in case the Board of Directors has changed over time)
• Proof of resignation of Director/s (in case the Board of Directors has changed over time)
• PAN Card of the company or PAN Card Application Acknowledgement (for New Companies which are less than 90 days)
• Shareholding pattern of the company as per the bank’s format

Board Resolution Format for Opening Company Current Account

The following format can be used to prepare a Board Resolution for Opening Current Account of a Private Limited Company.

 SAMPLE FORMAT

CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF (COMPANY NAME) HELD AT THE REGISTERED OFFICE OF THE COMPANY AT (ADDRESS) ON (DATE) AT (TIME)

A proposal to open a current account with the (Bank Name and Address) was placed before the Board for conducting its day-to-day financial transactions. After discussions, the Board unanimously:

“RESOLVED THAT Current Account in the name & style of ‘(COMPANY NAME)’ be opened with the (Bank Name and Address), for the operations of the activities of the Company and that the following Authorized Signatory(ies) of the Company be and are hereby authorized to open and operate the said account:

INDIVIDUALLY

1. Authorized Signatory
2. Authorized Signatory

JOINTLY

1. Authorized Signatory
2. Authorized Signatory

AND

1. THAT the said Bank be instructed to accept and act upon any instructions relating to the account kept in the name of the Company or relating to any transactions of the Company with the Bank, provided the instructions are signed by the authorized signatory(ies) of the Company in the manner mentioned as above.

1. THAT the said Bank be instructed to accept receipts for money, deeds, securities or other documents or papers or property or any indemnities given on behalf of the Company provided they are signed by the authorized signatory(ies) of the Company in the manner as mentioned above.

1. THAT the bank be furnished with a list of the names of Directors of the Company and a copy of the Memorandum & Articles of Association and be from time to time informed by notice in writing under the hand of the Directors/Authorized Signatory of the Company of any changes which may take place therein and be entitled to act upon any such notice until the receipt of further notice under the hand of any Directors / Authorized Signatory.

1. THAT the resolution is communicated to the Bank and remain in force until duly rescinded and notice thereof in writing be given to the Bank by any of the Directors of the Company.”

“RESOLVED FURTHER THAT the aforesaid power entrusted to the said official shall be valid and effective unless revoked earlier by the Board or shall be exercisable by him so long as he is in the concerned to the Company.”

“RESOLVED FURTHER THAT all acts, deeds, things, matters, etc. as aforestated shall be deemed to be valid and enforceable only if they are consistent with the instant resolution as may be relevant in this case and that the Board shall not be responsible for any acts beyond the scope of the aforestated powers done by (Name of the authorized person(s) and such invalid, illegal acts, and acts done beyond the scope of powers granted in this Resolution shall not bind the Company against any third parties or before any authorities in any manner and that the Board shall not be answerable in that behalf.”

“RESOLVED FURTHER THAT a certified copy of the resolution be given to anyone concerned or interested in the matter.”

For (COMPANY NAME)

            (Director Name)

For more information about opening a current account for a private limited company, talk to an IndiaFilings Business Advisor.