Pan no. of individual bill under company

Hi all,

I have received a bill from one of my contractor he provides bill under his company (not proprietorship for sure) but he provides PAN No. of his self and asks me to make me the payment under his name including company name!! eg. XYZ company his name is abc cheque infavour of "ABC XYZ Company".

Now my question is whether i have to deduct tds contract under individiual 1% or Company 2% and

whether i can issue cheque in the favour as he requires??

thanks in advance,

regards,

Meyyappan.S