Current accounts in a bank are opened by business men who have higher turnover with regularly business transactions taking place in bank.
Our saving account has a limit on withdrawal even irrespective of the balance in your account. There are also restrictions on per day withdrawal limit. One person can not withdraw more than the specified limit of the saving A/c.
One can avoid these difficulties by opening up a current account. In current account, you do not have restrictions on withdrawal limit, you have freedom to do as many transactions and deposits as your business require.
After getting certificate of incorporation, the company can commence its business in India. Before starting business, the company should open a current account in any nationalized or private bank.
To open your current account you need to provide following documents to the bank;
- Current account application form
- Certificate of Incorporation
- Photo copy of Company’s PAN Card or form 60
- MOA and AOA
- Board resolution authorizing to open a bank A/c on behalf of the company.
With these documents you can open your current account. Different banks are providing different facilities. Based on your requirements you should decide which bank and product will be best for you.
Unlike saving A/c, the bank will not charge you for number of transactions, cheques books and others based on the minimum balance fixed.
Before opening up your current account you should enquire about this. There are private banks where you can easily open up your current A/c but the problem is there will be some hidden charges to which you will be unaware at the time of opening up your A/c.
Procedure of opening your company’s Current Account
Before starting the process your company must decide that they want to open up a bank account. This decision will be taken at the first board meeting of the company. But it is not compulsory that you should decide it at the first board meeting. You can even do it in your subsequent board meetings.
In your company’s board meeting, the board need to pass a resolution by authorizing any two directors or one director to open a current account and allowing them to do transaction on behalf of the company.
After the resolution is passed, the authorized director can process the current account form with all the additional details required for opening up a bank current account.
If you do not have the specific format of passing board resolution then you can ask your bank to provide you the format.
You need not provide the board resolution itself. What you need to do is, provide a certified copy of the board resolution in the company’s letter head.
In addition to all the above documents the bank may ask you for an application to the bank for opening up an account or some other details may be required. Nationalized banks may ask you to get some existing customer who can introduce you to the bank. But it all depend how you negotiate, if you talk to them then without introduction you can open up your current account.
