Every business entity needs to comply with certain laws and regulations. Click here to know about the benefits & list of important corporate KYC documents for verification!
Operating a business checking account makes it easier to manage business finances daily. When approaching a bank to open a business account, one must ensure that they carry with the Know Your Customer (KYC) requirements. The Reserve Bank of India mandates the KYC to prevent fraudulent activities concerning financial institutions' operations. Irrespective of the bank people's approach, the list of required KYC documents for companies remains the same.
Business entities must provide proof of business ownership for opening and operating a checking account. The following types of business entities must fulfil the KYC documents requirement for companies:
The corporate KYC documents required for business entities differ based on the type of ownership. These documents are helpful not only for mitigating the internal risk management of banks but also for preventing financial fraud.
Generally, proof of identity and address of the business owner and their corporate entity is required. Here is a list of different business entities and the KYC documents for each company.
Any business owned and operated by one individual is called a sole proprietorship firm. In this case, the individual and business entities are considered the same. Based on the specific bank requirements, the following corporate KYC documents are acceptable:
A business registered under a partnership between two or more people with a maximum of 20 people is called a partnership firm. The partnership deed explains the partners' responsibilities, sharing of profits, and losses. The following KYC documents for companies must be submitted to verify the firm's credentials:
LLP combines elements of a corporation and partnership firm where the partners have limited liability in the firm. Corporate KYC documents for companies of LLP type include:
A private limited company has many directors who have ownership of the company. A minimum of two people can open such a company.
On the other hand, a public limited company must include at least seven directors, where ownership is shared with the public through stock options. The following documents must be provided for KYC for public or private limited companies:
KYC for business entities is more detailed because it allows banks to take measures to avoid fraudulent activities. Stakeholders must visit the branch in person to submit KYC documents for a private limited company.
Is a PAN card mandatory for corporate accounts?
PAN cards of authorised users of the bank account and the company or partnership firm PAN card are mandatory for corporate accounts.
Can a checking account for an online business operating from home be opened?
Yes, the documents required remain the same. The business owner may use their home address as the business address.