Open a Bank account for a Proprietorship

Proprietorship or Sole Proprietorship is when a single person has all ownership rights of his company. It is owned by a single man though many can work under him, legally he is the only one who is responsible for the firm and hence has the right to claim all the profits made by the company. But he has to claim all the losses made too. It is one of the most common types of business in India. They are very easy to start and have minimal requirements. Their existence is established by Tax registrations and other business registrations (compulsory for setting Proprietorship) since Government of India do not provide any mechanism for incorporating a Proprietorship. Described below is how you can open a bank account for a proprietorship.
RBI or Reserve Bank of India have laid down certain rules and regulations for opening a Bank account for a Proprietorship. Choose a bank you seem fit for your firm. Every bank has their own set of forms that are required to be filled in order to open a Bank Account for a proprietorship. They can be downloaded from the online web portals of the bank or can be filled directly by visiting the bank. Among many things required PAN card is a must along with Entity proof that is your Business proof and also identification proof is required, there is a list of documents available on bank's website as to which documents can be considered as Entity proof. After filling all the required forms and arranging all the required documents they are submitted directly to the bank. After a specific period of time(different for different banks) when all the verification are done your account is successfully made but only after an initial deposit of a certain amount of money which again is different for different banks.
KYC or Know Your Customer is a process followed by banks and other businessmen to ensure that their customers are true and not misusing their services. Certain KYC guidelines are followed by banks and hence should be clearly read by an Entrepreneur to avoid any obstruction while opening a bank account. If you do not provide required KYC information or documents bank might not open your account. Therefore, it is necessary to provide a bank with all the required documents in order to open a Bank account.


This article has been contributed by Simmi Setia, Content Writer at LegalRaasta, an online portal for GST Software, GST Return Filing, GST Registration, Section 8 Company Registration, Nidhi Company Registration, IEC Registration, Fssai License, File ITR Online.