Is there a law to create current ac for proprietorship?

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Kapil Khanna (Querist)

06 July 2011 1. Is there a law which makes it mandatory to create current ac for proprietorship business?
2. Are there any issues if the savings account (of propr) is used instead?

Pragnesh

Pragnesh (Expert)

06 July 2011 How you can use saving account of Propertor when you will receive any income or receipt in favour of Firm ?

Kapil Khanna

Kapil Khanna (Querist)

06 July 2011 Most of our income will be in cash (collection from student registrations). Cheques will be issued by two companies with whom we can have understanding such that invoice is in name of Company, but cheque is in name of proprietor.
Do you think this will work? We would do this for the first year only while the business is very new and uncertain.

Guest

Guest (Expert)

07 July 2011 You can have savings account, No problem. There is no need of current account and there is no provision for that also.

Moreover, Your savings account or current account will be merged will making income tax return.

Guest

Guest (Expert)

CA Sumat Singhal

CA Sumat Singhal (Expert)

15 July 2011 Agree with Ankur ji, like registration of partnership deed is not mandatory but registration confers benefits accordingly for long term perspective and benefits you should open separate current account with bank.

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