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Bank account for proprietorship concern

Samuel (Student) (32 Points)

20 January 2017

Hi.. My friend would like to start a proprietorship concern. Whether he has to open new bank account for that or he can use his own account for that business purpose?

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8 Replies

Suresh Pai S (Tax Consultant) (1029 Points)
Replied 20 January 2017

It is always better to start a current account because there are restrictions on maintaining SB accounts.

Susmita Dutta, CA , CPA (CA ) (2141 Points)
Replied 20 January 2017

Open a current account in the name of business.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 20 January 2017

Sooner or later, transactions of any business are required to be carried out from current account. Business transactions are not allowed in savings accounts.

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vivek kumar jain (service/student) (559 Points)
Replied 20 January 2017

Current Account are meant for Business Transactions and Savings Accounts has the name suffice is meant for Normal Indivudual Savings.

Kamal vashist (Accountant) (183 Points)
Replied 20 January 2017

You can use both but i will prefer you will open a current account because it is means for bussiness transactions and on the other hand while you using the saving account there are some restriction which restricts you to a certain point !!

Nitin Chordiya (CA final Student) (264 Points)
Replied 20 January 2017

Following benefits you will get if you will open a Current Bank Account -

Segregate business finance from personal finance
Professionalism in business
Ability to prove credit worthiness
Overdraft facility
Ease in banking transactions
The main objective of current bank account is to enable the businessmen to conduct their business transactions smoothly
There is no restriction on the number and amount of deposits
It enables the current account holder to obtain overdraft (short-term borrowing) facility

So it is always better for a business entity to open a seperate current bank account.

Chandan (Accountant) (40 Points)
Replied 20 January 2017

Hi,

Yes its always better to open a current account in the name of the business for carrying out business transactions. So you need to register with Shop & Establishment Act dept. and this will help you in opening a current bank account.

Regards

Chandan.