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What is Bank of India Corporate Account?

An Indian company account is a bank account opened in the name of a company. The account receives business income and facilitates various business transactions. A company account provides businesses with features including tax returns, credit and loans, automatic payments, etc.

Difference between a company bank account and a commercial bank account in India

Often, people think of corporate accounts as being the same as business bank accounts. Corporate and business accounts are essentially bank accounts used to handle business income and expenses. However, they differ slightly in the scale of business they serve.

While "business account" is a broad term referring to the bank accounts of business entities (including sole proprietorships, partnerships and limited liability companies), "corporate account" usually refers to the business accounts of medium-sized to large companies.

In addition, corporate accounts can be more expensive to open and have higher minimum balance requirements. On the other hand, business accounts are more affordable for start-ups and SMEs, and there are various commercial banking alternatives, such as neobanking.

Catalogue Company Accounts Business Accounts Company Size Suitable for Medium and Large Companies Suitable for Small Businesses Company Structure Must Have Board of Directors Individual Businesses Can Apply for Benefits & Services Lower Transaction Fees, Higher Profit Rates Varies by Bank

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Benefits of Corporate Bank Accounts in India

The benefits of having a corporate account include the following:

1. Enhancing credibility

Having separate bank accounts for personal and business purposes is very helpful because it makes a business look more professional. When customers see that a business has a corporate account, they are reassured of its legitimacy. Additionally, having this account helps business owners get better deals from suppliers and vendors.

2. Higher investment opportunities

A company account enables a business to deposit and increase excess funds by reinvesting them. Companies can also use this bank account to manage portfolios and sell and buy bonds, shares, new companies and other assets.

3. Providing liability protection

There are a variety of ways to store your business's money. However, while users may get more or less the same features, they will not get the liability protection that a corporate account provides. Another important benefit of a company account is that it separates the company's assets and funds from the business owner. As a result, the funds are the responsibility of the entire company rather than a single individual.

4. Achieving better financial management

Other important advantages of a company account include budget and expense management. In addition, it gives businesses a clearer picture of their financial situation as owners can view detailed reports and bank statements about their company.

5. Easier financial transactions

Thanks to company accounts equipped with Internet and mobile banking services, business owners can carry out basic business transactions smoothly and efficiently from anywhere. Multi-location fund transfers as well as deposits and withdrawals from any location are additional advantages of the corporate account.

Who can open a company bank account in India?

A business account can be opened by any business entity within India, including corporations, partnerships, sole proprietorships and limited liability companies. Whereas, the criteria and documents required to open a corporate bank account vary depending on the type of business structure.

However, a company account can be opened only by a company established by law. The opening of an account should be supported by a corporate resolution passed by the board of directors of the company. Therefore, it is easier to open a commercial bank account.

Operational independence

As corporate bank accounts are more formal, they can only be operated by a group of authorised signatories. The company holding the account may appoint the signatories by passing the relevant board resolution.

On the other hand, a business account usually operates as a personal bank account for the business owner, although it may be opened in the name of the business. The business owner may have direct access to the account without the need to appoint other authorised signatories.

Liability to creditors

Since corporations are considered legal persons, corporate bank accounts are not considered personal assets of shareholders. Therefore, only creditors of the company can seize these accounts. These accounts cannot be used to pay off any outstanding personal debts of individual shareholders.

In contrast, ordinary business accounts are considered to be the personal assets of the business owner, and the business owner's personal creditors are free to seize those accounts.

What documents are required to open a company account?

As part of the company account opening process, businesses are required to submit several documents in order to complete a KYC check. The following documents are generally required when opening a company account:

Company formation documents, such as certificate of incorporation, business registration certificate and articles of incorporation. Proof of business, such as financial statements or business plans. Proof of company address. Copy of the resolution of the Board of Directors of the company authorising the opening of a bank account. Proof of identity documents such as passports of major shareholders or beneficial owners of the company or any identity cards issued by the relevant government. Proof of residence of the principal shareholder or beneficial owner. List of signatories authorised to operate the company's bank account.

Be sure to discuss with your bank the documents required to open a new company account. Failure to submit the relevant documents may result in the bank rejecting the company's application to open an account.

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