Opening a bank account
There will be some requirements to be fulfilled after online LLP incorporation. Some of the important requirements are opening a bank account in the name of the LLP, Income tax return, annual compliance of an LLP with MCA. Opening a current bank account is mandatory for every type of entity. It allows receipt or payment of money for business transactions.
Advantages of a Current
Account for an LLP
Advantages of the current account are as under:
- Ease of carrying on business:
A current account makes banking easy.
It has more benefits than a saving account. Banks provide many facilities to
the current account holder. It also provides value-added services without any
additional cost. It provides 24*7 banking, internet banking, doorstep banking,
which are very important to run a business smoothly.
- Easy to manage personal and business transaction:
A current account is for business
transactions. Hence, it segregates personal transactions and business
transactions. It is useful to record transactions and maintain books of accounts.
It will show the true position of the LLP in terms of profit or loss.
The lenders always check the credit
rating of the LLP before giving any loans. Hence the bank statement of pure
business transactions can denote the true rating. Often, a letter of credit or
guarantee is needed so getting it from a bank with a current account increases
In any business, professionalism is a
basic requirement. Having a current account shows that the business is operational.
Carrying out transactions through the current account increases goodwill of the
Every business needs some credit in
day to day transactions. In a current account, the bank easily provides
overdraft facilities. Hence in case of
shortage of funds, overdraft facility can be availed. Bank may charge some interest,
but short term requirements will be met.
While opening a current account all the terms and conditions
must be specified for operating the account. After opening a current account,
all the partners must deposit the agreed amount of capital in the bank account.
After this, business can be started.
The need for a current
A current account is a first step of post registration
compliance for an LLP. It is necessary for every type of firm. A business
involves huge transactions daily and with a current account, any number of
transactions can be done. It is a non-interest bearing account. Hence it is
helpful to carry out business smoothly without restrictions on the number of
Documents required to
open a current bank account for an LLP.
- Certificate of incorporation of LLP
- PAN of LLP
- Registered office address proof
- PAN and address proofs of all
partners of the LLP
- LLP agreement
- Board resolution
- Any other document as specified by bank
The process of opening a current account is easy and fast. Hence it must be opened as soon as the LLP is incorporated, to start the business quickly. A current account is also mandatory for other business registrations such as GST, IEC, etc. So one must open a current account in the name of the LLP to avail all the advantages. An LLP must also need to take care of mandatory post compliances for an LLP.