How to Open Current Account for Sole Proprietorship in India

Sole Proprietorship is the easiest form of business done in India since it isn't governed by any specific laws. Under sole proprietorship's, the compliance's are minimal and easy to fulfil. Sole Proprietorship means a business carried on by one person. The decision making and management of the business is in the hands of a single person.

Documents Required For A Sole Proprietorship

Aadhar Card

Aadhar number is now a necessity for applying for any registration in India. Also, the income tax return can only be filed if the person has linked his PAN card with the Aadhar number. Contact nearest E-Mitra or Aadhar Seva Kendra if you haven't got an Aadhar number yet. After applying for an Aadhar card, a hard copy of the same is received at the registered address in around 15-20 days.

PAN Card

You can't file your income tax return until you get a PAN. So if you don't have a PAN number, apply for it at the earliest. PAN card can be applied online and it costs Rs. 110, approximately. For applying, you need a scanned photograph, identity proof, and address proof.

The form can be submitted online by verifying it through Aadhar e-KYC. Once the PAN card application is submitted, it is checked at NSDL for verification, and if NSDL finds the information correct, it allots the PAN number within 7-8 days. Further, a hard copy of the PAN card is received at the registered address within 15-20 days.

Bank Account

After you have got your Aadhar Number and PAN, you can visit any bank for opening an account with them. Apart from Aadhar Number and PAN, you need to carry identity proof and address proof. For opening a current account, you need to submit a GST registration document to the bank officials too.

Registered Office Proof

• If it is a Rented Property: Rent agreement and NOC from a landlord.
  
• If it is a Self-owned Property: Electricity bill or any other address proof.

Registrations Required For A Sole Proprietorship

In addition to the above documents, there are few registrations required in order to establish the existence of the firm:

Registering as SME

You can get yourself registered as a Small and Medium Enterprise (SME) under the MSME Act. The application can be filed electronically. Although it isn't compulsory to register as an SME, it is highly beneficial, especially at the time of taking a loan for the business. The Government runs various schemes for SMEs where loans are provided at the concessional rate of interest.

Shop and Establishment Act License

This license isn't mandatory at all places, but it is required to be obtained according to the local laws. It is issued by the municipal corporation and is issued on the basis of the number of employees.

GST Registration

You can get yourself registered under GST if your annual turnover is more than Rs. 40 lakhs. Also, if you are doing online business (selling through amazon, Flipkart etc.), you are required to get a GST number. For registering under GST, you need the following documents –

• PAN card, photo and Aadhar Card of the proprietor
• Proof of business place (electricity bill/ rent agreement)
• Bank statement copy (first page for verifying bank account number, address and IFSC code)

GST registration is easy and can be done via the GST portal. Normally GST number is received within 3-4 days of submitting the application.

Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice. It should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.

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