Limited companies are of two kinds. They can be classified as (i) Private Limited companies (ii) Public Limited companies.
While opening Current Accounts of above two categories of accounts, the customer has to comply KYC norms applicable to the company and its Promoters,Directors, Authorised signatories to operate the accounts. The articles on the common requirement and KYC formalities are published in this website. Further, let us now examine, what are the other specific requirements for opening captioned accounts.
Private Limited Company: A private company is one that is registered/ incorporated under Indian Companies Act 1956, with its memorandum of association and article of association certified by the Registrar of Companies. A minimum paid up capital of Rupees one lakh or more, is required for a private limited company. The authorized capital is prescribed in the memorandum of association of the company. The minimum number of shareholders required to form a private Limited company is two and maximum is fifty. The liability of the members is limited. The shares of private limited companies cannot be freely transferable between or among themselves. It is not allowed to invite public to subscribe to its shares and debentures. Private limited companies are also prohibited from any invitation or acceptance of deposits from persons other than its members, directors or their relatives. Unlike Public Limited Companies, Private Limited companies are exempted from filing a prospectus with the Registrar and they need not obtain the Certificate of Commencement of business. The private limited companies need not hold the statutory general meeting and they need not file the statutory report.
Public Limited Company: A public limited company is one that is registered/ incorporated under Indian Companies Act 1956, with a minimum paid up capital of Rupees five lakh or such capital as may be prescribed in the memorandum of association. The minimum shareholders required to form a public limited company is seven and there is no restriction on maximum numbers of shareholders. The liability of the shareholders is limited. It is essential to a public limited company to file the article of association and memorandum of association to the Registrar of Companies for registration of the company.It is the statutory obligations of a limited company to conduct the Annual General Meeting (AGM) of the shareholders and file the statutory report to ROC.
The following documents are required for opening bank account of limited companies in the banks:
- A true copy of the certificate of incorporation attested by a Director or Secretary of the company.
- A copy of the updated Memorandum and Articles of Association attested by a Director or Secretary of the company.
- A copy of the Board Resolution passed at a meeting of the Board of Directors (not by circulation) duly certified by the Secretary of the Company for opening the account and operation instructions thereon. The resolution should clearly state the name of the bank, persons authorized to open and operate the account and carry on such other transactions as dealing with securities, powers to draw, accept, endorse etc. Click here to read related article Common requirement for opening all types of current accounts