Process for opening your first business bank account | North Loop Official Blog
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North Loop
06 Jan 2021

Process for opening your first business bank account

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Opening a corporate bank account for your venture can not only provide credibility for your company but can also make the entire bookkeeping process easier. A business account segregates personal and professional expenses, which help improve cashflows and remove the complexities from the tax filing procedure. A corporate account also allows business owners to track expenses, manage payroll, carry out transactions, and plan a budget effectively.

Before we proceed to the process of opening your first bank account, let us first understand what a corporate bank account means.

What is a corporate bank account?

A corporate bank account is a type of specialized current account loaded with features. As a business owner, you can use a corporate account for investing, daily banking, or savings purposes. From the daily banking perspective, corporate banking can be used by businesses to receive payments from vendors, pay suppliers, provide salaries to employees, handle bill payments, etc.

Sign up for a free business banking account in 5 minutes

Benefits of a corporate bank account-

1. The business account holder can track all business-related transactions. A corporate bank account can also help provide insights into the financial health of the company. These insights help business owners make financial decisions that affect the future of the company.

2. Any loan that you avail for the purpose of conducting business has no correlation with your personal credit score. Hence, having a separate business account can limit your liability..

3. A business owner can avail of bank reconciliation statements with the help of a corporate bank account. These statements help one tally their cash-in-hand and cash-at-bank balances.

4. Corporate banking comes with a wide range of benefits, such as minimal withdrawal and transfer charges, RTGS and NEFT facility, free chequebooks, corporate net banking, etc.

5. A corporate account provides a lot of credibility for your business, which can help build your reputation. As an owner of a credible business, things like availing loans can be fairly easy.

Factors to consider when opening a corporate account-

1. Minimal fees- While opening a corporate account, you need to consider the bank’s set of fees and charges pertaining to annual maintenance, withdrawals, money transfers, phone and net banking, etc.

2. Existing relationship with a bank- If you have a personal account with any bank, try to open a corporate account with the same. Your corporate account opening procedures will be easier if you already have an existing account with them. Unless you opt for an easy to use bank like ours.

3. Connectivity and widespread network- Ensure that your preferred corporate banking partner has a wide network of branches and ATMs that ensure the smooth flow of transactions.

4. Facilities such as corporate net banking and phone banking are a must while shortlisting banks. These facilities help you make transactions without the necessity of visiting your bank branch.

5. Credit-related support- Ensure that the bank provides support in case your business requires it. Facilities such as loans, lines of credit, credit cards can help your business stay afloat in case of emergencies.

How to open a business bank account-

You can open a corporate bank account upon submission of the following documents-

Sole proprietorship-

  • Registration certificate of the firm.
  • Authorized documents confirming the name and address of the firm.
  • PAN card of the proprietor.
  • Passport size photographs of the proprietor.
  • Income Tax returns.

Partnership Firm-

  • Partnership deed.
  • ID proof and address proof of the authorized signatories of the firm.
  • Recent passport size photographs of the authorized signatories of the firm.
  • Authorized documents confirming the name and address of the firm.
  • Trade license.
  • Permanent Account Number of the entity.
  • Partnership letter.

Public/private limited company-

  • Certificate of incorporation.
  • Memorandum of Association and Articles of Association.
  • Authorized documents confirming the name and address of the firm.
  • Board Resolution.
  • Permanent Account Number of the company.
  • ID proof and address proof of the authorized signatories of the firm.
  • Recent passport size photographs of the authorized signatories of the firm.

Can I open a business account online?

In the light of the pandemic, most of the major nationalized banks in India have provisions for companies to open business accounts online. All you have to do is fill the online application forms, submit the required documents, and complete the KYC procedure.
Some major nationalized banks even offer zero balance current accounts, which don’t require account holders to maintain any balance.

Best business bank accounts 2020/21-

Best Business Bank Accounts 2020/21
Bank NamePros
ICICI Bank Corporate AccountBest facilities
HDFC Bank Corporate AccountBest products
North LoopBest overall bank
CITI Bank Corporate AccountBest for global businesses
State Bank of India Corporate AccountBest widespread network of branches and ATMs

Benefits of North Loop’s Business Virtual Bank Account-

  • Unlimited virtual accounts for each business need/department- Unlimited virtual accounts lets you streamline expenses according to specific business requirements, making budgeting a quick and easy process

  • Open a bank account and get it activated in just a few hours- Save time spent on visiting physical bank branches to open a business account and focus on your business needs instead. Start making and receiving payments immediately to ensure smooth operations of your business.

  • No Minimum Average Balance- No MAB gives you greater flexibility with your business cash flows and helps save any fees incurred due to non-maintenance.

Click here to know more about North Loop’s Business Virtual Bank Account.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.