A current account is a necessary banking facility for businesses in India. Since companies are involved in high-value and frequent financial transactions, a current account helps in managing the daily operations of the company smoothly. Opening a current account is one of the initial compliance requirements, whether you are a newly incorporated entity or have recently completed your company registration in Delhi.
In this blog, we discuss the meaning of a current account, the documents required, and the step-by-step procedure to open a current account for a private limited company.
What is a Current Account?
A current account is a type of bank account that is specifically designed for businesses, firms, and professionals who need to carry out frequent and high-value transactions.
Major Characteristics of a Current Account
- Suitable for making regular deposits and withdrawals
- No restriction on the number of transactions
- Overdraft facility available (subject to bank approval)
- Designed for business use and not for earning interest
Unlike savings accounts, current accounts usually do not earn interest, as their primary purpose is transaction management rather than savings.
Why Does a Private Limited Company Need a Current Account?
A private limited company is a separate legal entity, and all its financial transactions must be carried out in the company’s name. A current account helps in:
- Receiving payments from customers
- Making vendor and salary payments
- Paying taxes such as GST, TDS, etc.
- Maintaining clear and transparent financial records
Banks also require companies to open a current account after company registration in Delhi to ensure proper financial monitoring and regulatory compliance.
Documents Required to Open a Current Account in a Private Limited Company
To open a current account, banks require certain documents to verify the company and its directors.
Company Documents
- Certificate of Incorporation issued by the Registrar of Companies (ROC)
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- PAN card of the company
- Board Resolution approving account opening and authorised signatory
- List of directors in the bank-prescribed format
Director / Authorised Signatory Documents
- PAN card of all directors
- Identity proof (Aadhaar card, Passport, Voter ID, or Driving Licence)
- DIN (Director Identification Number)
- Proof of appointment or change of directors, if applicable
- Proof of resignation, if any director has resigned
Address and Additional Documents
- Registered office address proof (utility bill, GST registration, ESIC/EPFO registration, or any other government licence)
- Beneficial owner details, if applicable
- Any other document required by the bank
Step-by-Step Guidelines to Open a Current Account in a Private Limited Company
Step 1: Choose the Bank
Select a bank that offers suitable current account services for your business. Most banks provide both online and offline account opening options.
Step 2: Complete the Application Form
- Visit the bank branch or official website
- Select the “Business Current Account” option
- Choose the account type based on business requirements
- Fill out the application form carefully
Step 3: Submit the Application
- Submit the form online or at the bank branch
- Ensure all details match company records
Step 4: Bank Verification
After submission, a bank representative will contact the company to complete formalities such as KYC verification.
Step 5: Submit Required Documents
Provide all company and director documents as requested by the bank.
Step 6: Account Activation
After successful KYC and document verification, the current account will be opened in the name of the company.
Important Points to Keep in Mind
- Company PAN is mandatory
- KYC of all directors must be completed
- Board Resolution is compulsory
- All records must match ROC details
Conclusion
A current account plays an important role in the smooth financial functioning of a private limited company. It supports regular business transactions and proper financial management. The account opening process is simple, and most banks now allow online applications, making it time-saving and convenient. With the right documents and proper guidance, a private limited company can open a current account without any hassle.
Frequently Asked Questions (FAQs)
1. Is a company PAN card mandatory to open a current account?
Yes, a company PAN card is mandatory to open a current account for a private limited company.
2. What is the difference between a savings account and a current account?
A savings account is used to save money and earn interest, whereas a current account is designed for businesses that carry out frequent transactions.
3. Is KYC required to open a current account?
Yes, KYC verification of the company and its directors is required as per banking regulations.