Current Account for a Business: What It Is and Documents Needed

A current account is a bank account built for business use. It allows unlimited transactions, overdraft facilities in many banks, and no interest on balances. Companies, LLPs, firms and proprietors use it to receive customer payments, pay vendors and keep business money apart from personal funds.

Why a current account matters

After you complete company registration, the account is where share capital goes in and every business receipt and payment runs through. Clean books, easier GST and income tax work, and credibility with customers all start with a separate business account. Some businesses also need it to qualify for a loan or overdraft.

Where and when you need one

• Receiving share capital from subscribers after incorporation
• Paying salaries, vendors and statutory dues
• Collecting customer payments through UPI, NEFT, RTGS or cheque
• Meeting GST, TDS and income tax return records
• Applying for business loans or overdraft limits

Documents usually needed

Banks differ, but the usual set includes:

• Company: certificate of incorporation, MOA and AOA, company PAN, board resolution authorising the account, and KYC of directors and signatories
• LLP: certificate of incorporation, LLP agreement and a partners’ resolution
• Partnership firm: partnership deed, firm PAN and partners’ KYC
• Proprietorship: owner’s PAN and KYC, plus proof of business such as GST registration or Udyam
• Address proof of the business premises and passport-size photos

Many banks also ask for a minimum average balance and charge fees if you fall below it. Compare these before you pick one.

Common mistakes

• Opening the account in a personal name for a company’s money
• Business name on the account differs from the registration documents
• Missing board resolution or outdated signatory details
• Ignoring minimum balance charges and transaction limits

Related guides: What is a PAN Card, Photo ID and address proof for company registration, Registered office

FAQs

Can a private limited company use a savings account?

No. A company should operate through a current account in the company’s name.

Does a current account earn interest?

Generally not. Some banks offer sweep-in options, so ask your bank.

Can a proprietor open a current account?

Yes, usually with the owner’s KYC and a document that proves the business exists.

Need help getting your papers ready for the bank? Talk to a Taxhint expert and we will guide you.