Do you know about the How to open a current bank account in a bank as Sole Proprietorship Firm in India? In India mostly, more than 50% legal entities are the Sole Proprietorship Firm. In the Sole Proprietorship Firm, the ultimate objective is opening a current bank account so there is no separate registration certification for the Sole Proprietorship Firm like a Private Limited Company or LLP or OPC or Partnership Firm. Let’s learn about a Checklist which is required to open a current bank account in a bank as Sole Proprietorship Firm as per the RBI Guidelines in any bank.
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Checklist for the open a current bank account in a bank as Sole Proprietorship –
We divided Checklist in the 2 Category –
a) Entity Proof b) Personal Proof
a) Entity Proof Checklist –
As an Entity Proof, you have to require at least one documents which are on the Sole Proprietorship Firm Name so its required following Anyone One or Two Documents Required –
| Particulars | Short Details |
| 1. Service Tax Registration Certificate (ST-2) | Its issued by the central excise and custom board department. its required by the service provider as a Sole Proprietorship Firm and mostly Firm can avail the service tax registration certificate in the starting to open a current bank account on the Firm Name. Note : Now Service Tax has been replace by GST Registration so checkout here |
| 2. Valid Shop act License | Gumasta License | Trade License | Its issued by the local municipal party and required by the trading business where they have a physical shop. In the Maharashtra State its also called Gumasta License & In the WB or some other state its called Trade License. |
| 3. VAT/CST Registration or TIN Number | Its issued by the each state VAT Department. its required by the dealer or trader or manufacture which are dealing in the VAT eligible products or doing the business online with the e-commerce companies like Flipkart | Snapdeal | Amazon | Paytm etc. VAT/CST are replace by GST Registration. |
| 4. Professional Tax Registration | Professional Tax Registration is applicable only in the some state, so if you professional service provider like the doctor or CA etc then go with the professional tax registration and open the current bank account on that basis. |
| 5. License i.e Certification of Practice issued by the Chartered Accountant, Company Sect or CWA etc. | Its issued by the practicing CA or other professional like CS or CWA regarding the nature of the business and identification of the documents. |
| 6. Food or Drug License by Authority | if you are dealing in the Food related or medical business then you have to require the food & drug license on the firm name so you can open a current bank account for the same. |
| 7. Certification of Registration Under any Specific Statue of Act of the Govt | In some business you have to require the particular license. for ex – Factory Registration act so you can open the account on this license basis. |
| 8. Valid Business License or Certification of Registration issued by the state or central government. | In each state, there is a different policy for some industry where govt provide the grants or loans support so they issued the certification of registration under that particular act so you can use this certification for the bank account. |
| 9. Permission Certification issued by the Central or State Govt in the SEZ Zone, Software Technology Park, Export Oriented Units , Export Processing Zone etc. | Govt of India support the particular line of the business so they established the special economic zone or software technology park so if you got the permission on the paper on your Firm Name with the address then its work for the current bank account. |
| 10. Registration Certificate of recognized provident fund with the PF Commissioner | When you are doing the business that time you have to register under some other acts also like EPF Act so if you have a certification regarding this then its work for the current bank account. |
| 11. Registration Certificate issued by the MSME Department. | if you apply for the SSI Units from the MSME Department and got the certification then its work for the current bank account. |
| 12. IEC Code ( Import Export Code) | If you are doing the import-export business and apply for the IEC Code on the legal entity name then its work for the current bank account. |
| 13. Latest Income Tax Returns which has been filed in the name of the sole proprietorship firm including the computation of the income | If you are filings your business income in the ITR then you can use your Final ITR with the Computation for the current bank account. |
| 14. Latest VAT/CST or ST Returns | if you have old TIN Number or ST Number and filings the regular returns then you can use the final returns for the current bank account. |
| 15. TAN Allotment Letter on the Legal Entity | TAN is required for the deducting the TDS so if you have TAN Number on the firm name then its work for the current bank account. |
| 16. Latest Property Tax Payment or Utility Bills Copy | if you have tax payment receipt Copy on the Legal Entities Name then you can use for the current bank account. |
b) Personal ID & Address Proof –
You have to require the personal ID & Address proof also apart from the Legal Entity Documents which are following –
- PAN Card Copy of the Proprietor
- Address Proof as Adhar Card Copy or Voter id or Passport Copy or Driving License anyone
- Utility Bills Copy or Personal Saving Bank Account Bank Statement etc.
Legal Expert Suggestion – Before applies any above certification, first of all, you have to fine your nature of the business. if its a service based business then always go with the reliable certification which can prove your legal entity as Sole Proprietor. So we give you below some suggestion for the service or product based business –
a) Service Based Business – Go with the Service Tax Registration Certification. Its not mean that you have to pay the service tax. still, you are eligible for the exemption of the 10 lac Rupees Turnover. its a best reliable certification for the service providers.
b) Product Based Business – Go with the VAT/CST Registration or Shop act License or MSME Certification for the product based business. VAT/CST is a permanent solution but in some state its really expensive so you to always go with the Shop act License or MSME Certification.
You can Checkout below Video also on How to Register a Sole Proprietorship Firm in India
[embedyt] http://www.youtube.com/watch?v=JfJ9Zq-aJK8[/embedyt]
Hope this article helpful for you to open a current bank account in a bank as Sole Proprietorship.