It’s better to open a Bank account in name of company to keep business and personal finances separate. Company incorporation is not the end, but this is the utmost time when necessary steps for approvals/compliances are required to start the business. One of the important steps is to timely open a Bank account as the same is required for financial transactions, receipt of share capital amount and smooth functioning of business. Basic steps to be followed to open a Bank account:

• Consult the Bankers – At the very outset you need to consult the bankers with whom you wish to open an account and if they require special form of Board Resolution, obtain a specimen of the same.

• Convene a Board Meeting – Board Meeting is to be convened after giving notice to all the directors.

• Pass the resolution – In Board Meeting, pass the resolution authorizing any of the directors or officers to operate the same, jointly by any two of them at any time and also specifying the nature of the account and the purpose for which it is being opened.

• Produce documents – Following documents are required to be produced before bankers:
  • A Certified copy of the resolution;
  •  A Certified copy of the Memorandum and Articles of Association;
  • Certificate of Incorporation, etc.

• Get introduced by banker’s existing clients – Along with the aforesaid documents there is need to get yourself introduced by one of the banker’s existing clients as reference on which they would open an account for you.

• Specimen of Signatures – Send specimen signatures of the directors or officers whose names are given in the resolution who will operate the bank account to the said bank.

• In case of any monetary limit – If you want to keep any monetary limit for any officers for operating the bank account, then mention that in the body of the resolution and also the operating instructions.

• Fine in case of Default to give notice – Every officer of the company whose duty is to give notice of the Board meeting as aforesaid and who is in default will be punishable with fine of upto Rs. 1000.

Taxmantra.com will assist you in all Business Incorporation & Maintenance issues including Creation of LLPs, Companies etc and also in post incorporation issues such as assistance in other registrations, ROC Compliances and others.