Advantages & document checklist for opening a bank account for an LLP

Checklist for LLP Account Opening Documents

Starting your business as a Limited Liability Partnership in India requires you to follow a lot of steps. Even after you successfully register LLP in India, you need to follow certain post-registration compliance requirements to commence business activities. Opening a bank account for the LLP is one such step. It is mandatory for all body corporates to have a separate bank account. Through this blog, you can get an idea of the LLP account opening documents requirement, so you can easily open the current account for your LLP. 

Advantages of LLP Current Account

As a part of the LLP registration process, you also need to open a bank account for your LLP. So, you will need to keep the LLP account opening documents in handy before you move ahead with the process. However, a lot of people wonder about the benefits of having a separate bank account for LLP. Here are the benefits of a current account for LLP:

Ease of carrying on business

A current account makes banking easy. It has more benefits than a savings account.  Banks provide many facilities to the current account holder. It also provides value-added services without any additional cost. Further, the documents required for LLP account opening also differ from saving accounts. Besides, it provides 24*7 banking, Internet banking, and doorstep banking, which are very important to running 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.

Increases creditability

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 creditability.

Professionalism

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 the goodwill of the LLP.

Overdraft facilities

Every business needs some credit in day-to-day transactions. In a current account, the bank easily provides overdraft facilities.  Hence in case of a shortage of funds, an overdraft facility can be availed. The Bank may charge some interest, but short-term requirements will be met.

The need for a current account

Every business needs some credit in day-to-day transactions. In a current account, the bank easily provides overdraft facilities.  Hence in case of a shortage of funds, an overdraft facility can be availed. The Bank may charge some interest, but short-term requirements will be met.

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 the Bank.

Conclusion

The process of opening a current account is easy and fast. Hence you must collect all llp account opening documents as soon as you get the certificate. 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 of all the advantages. An LLP must also need to take care of post-registration compliance for LLP.