Startups have now become a crucial part of the Indian business ecosystem. And, with their new way of doing business comes a host of unique requirements – especially on the financial front.
The Indian banking sector has stepped up the to needs of this new breed of businesses with novel facilities that cater specifically to its needs. And, among the many things a startup needs to get going, getting a business account for banking is perhaps the most important one.
Without further ado, let’s jump into the all things business accounts, and how your startup can get started with one.
What is a Business Account?
A business account or business bank account is a specialised current account that comes with added features. Banks offer different types of business accounts based on different lines of business. For example, some banks offer business accounts built to meet the needs of import-export businesses and e-commerce ventures.
These specialised accounts help businesses network with peers in initiatives led by the financial institution, while benefiting from the services tailored to the needs of their business.
A business account built for startups would, thus, have features and services that are specially curated for their unique needs. Some financial institutions even provide resources with these accounts to help startups expand their business.
Steps to open a business account
Here’s how you can open a business bank account in a few simple steps.
Step 1: Register your business as a partnership, proprietorship, or a company under the Companies Act. Apply for licences (based on the nature of your business) and register under other Acts as necessary, like Customs, DGFT guidelines, Income Tax, etc.
Step 2: Apply for a startup business account online on the website of a financial institution. If the financial institution you want an account with doesn’t support that, then you can apply at its nearest branch.
Step 3: Collect all necessary KYC documents required to open the business account and hand them over to the financial institution. Once the officials at the financial institution are satisfied with your documentation, they will open your account.
Yes, it’s really that simple.
After your business account is opened, you can benefit from the various facilities that the financial institution offers. These include but are not limited to cheaper access to credit, professional services at negotiated rates, waiver of charges on debit cards, cheaper access to foreign exchange, reduced minimum balance requirements, and the like.
Documents required for opening a business account
Here are the documents you’re going to need to open a business account:
- Incorporation certificate or proof of business registration
- PAN of the entity
- Account opening cheque from an existing bank account
- Proof of Identity (any one): Voter ID card, driving license, Aadhaar card, PAN card, passport
- Proof of Address (any one): rent agreement, Aadhaar card, voter ID card, water bill, electricity bill, telephone bill, driving license, passport
- Latest passport size photograph
Note that you would have to submit KYC documents for all the authorised signatories of your business.
For individuals, the documents mentioned above will suffice for the process. However, based on the type of your business (partnership, company, etc.), you may need additional businesses.
You can find a more detailed list of the documents required here.
How do I choose the right business bank account?
You know how to open a business account. You also have your documentation in order.
The big question you ask yourself now is: where should I open a business account?
To answer that requires some amount of self-awareness.
There are dozens of financial institutions which could provide you with specialised banking offerings based on the needs of your business. For instance, along with business bank accounts built for startups, some banks provide you with consultancy services, advisory services, logistics solutions, and even access to co-working spaces.
They also offer digital payment support, cash management systems, bulk payments, and a host of other features. All you need to do is match the offerings of the bank to the needs of your business.
Other things that you must look for is the ease of usage, add-on services like payroll that will help make your life easier, and a banking partner that can give you all the services you need under one roof – so you don’t have to worry about using multiple platforms.
RazorpayX Current Account – the business banking hub you need
Built for growing businesses and backed by leading private banks, RazorpayX is the feature-loaded banking hub that your business needs.
Apart from giving you the standard features of business accounts built for startups, RazorpayX allows you to
- Add beneficiaries and transact instantly, without a cooling period
- Gain detailed insights into your finances from an intelligent dashboard
- Automate payouts with powerful APIs
- Set up approval workflows, so you never have to deal with OTPs
- Make tax payments from one dashboard – without having to hop portals
- Get full access to the RazorpayX product suite: Payouts, Vendor Payments, and Payroll
… all with 500 free payouts every month!
Ready to supercharge your finances?
Frequently Asked Questions
Do banks pay interest on business account balances?
No. Unlike savings accounts, banks do not pay interest on the balances of business accounts or current accounts.
Is there a limit to the number of times an individual can transact per day?
No. There are no limits on the number of transactions that a business owner can carry out per day with a business bank account.
Who is eligible to open a RazorpayX Current Account?
Registered enterprises involved in these business types can open a RazorpayX Current Account:
- Limited Liability Partnership (LLP)
- Private/ Public Limited companies/ OPC
- Sole Proprietorship
How can I apply for a RazorpayX Current Account?
Here’s how you can apply for RazorpayX in 4 simple steps:
Step 1: Sign up here or log into the RazorpayX Dashboard
Step 2: Select ‘Apply for a Current Account’ and hit the ‘Get started’ button
Step 3: Enter basic details about your business – your business type (proprietorship, partnership, or company), and your business category (e-commerce, ed-tech, and the like).
Step 4: Input the pin code of your registered business address, and click on ‘Submit’
And that’s it. The RazorpayX Team will get in touch with you and have your account up and running in no time!