Basic KYC Documents your Business Needs

basic kyc documents

Looking to understand what basic KYC documents your business would need to produce when approaching a payment gateway or a bank? Let’s find out.

Every business entity needs to comply with certain laws and regulations. KYC or ’Know Your Customer’ guidelines set by the Reserve Bank of India (RBI) make it compulsory for potential customers to submit a list of documents before they can start using a financial product – like a bank or payment gateway.

Why KYC?

Know Your Customer (KYC) is a mandatory RBI process that was incorporated by the banks to prevent any kind of financial fraud. This helps banks get to know their customers better and help manage risks and protect them from financial crimes like money laundering, identity theft, and terrorist financing.

KYC documents are required to:

  • Identify, locate, and authorise the customer
  • Comply with RBI’s Prevention of Money Laundering Act
  • Fulfil the bank’s internal risk management
  • Monitor transactions for regulatory and tax purposes

The list of specific documents may vary from bank to bank depending on the constitution of your business entity, which could be:

  • Sole proprietorship
  • Partnership firm
  • Limited Liability Partnership
  • Private or Public Limited Company

Let’s take a look at a list of common requirements for individuals connected to the business:

Proof of identity

  • Valid passport
  • Election/Voter’s ID card
  • Permanent driving license
  • Photo ration card
  • Government employee ID card
  • Defence ID card
  • Photo PAN card

Proof of address

  • Valid passport
  • Election/Voter’s ID card
  • Permanent driving license
  • Gas bill (pipeline connection only)
  • Latest electricity/water/phone bill (maximum 3 months old)
  • Property tax bill (maximum 3 months old)
  • Domicile certificate with address issued by a municipal corporation

In addition to one of these above documents, you will have to furnish your latest passport size photos. The number of copies will be specified by the bank you are looking to transact with.

Now let’s take a look at some specific documents that are required based on the composition of the business entity.

Sole proprietorship

When an individual owns, manages, and controls the business, it is known as a sole proprietorship entity. The individual and the business are considered a single entity. Hence, there are very few regulatory requirements for an individual setup. Any one of the following documents will do for a business account.

  • GST registration certificate
  • Excise registration certificate
  • Value Added Tax (VAT) registration certificate
  • Turnover tax registration certificate
  • Professional tax registration certificate
  • Commercial tax registration certificate
  • Certificate/licence issued by the municipal authority under the Shops and Establishments Act (Gumastha License) or Municipal Trade/Tax bill
  • Small Scale Industries registration certificate / Entrepreneurs Memorandum (Part II)
  • Importer Exporter Code Number certificate.

Partnership firm

When two or more people (up to a maximum of 20) agree to collectively run a business under a firm name, it is known as a partnership firm. It is not very different from a sole proprietorship, except that the responsibilities, profits, or losses are shared on a pre-decided basis, explicitly stated in a partnership deed.

Individual documents remain the same as required for a sole proprietorship. The only additional document is a copy of the partnership deed, along with the registration certificate.

Limited Liability Partnership (LLP)

An LLP is a hybrid entity, with elements of a partnership firm and a corporation. Some or all partners may have limited liability towards the business or other partners. This requires:

  • An LLP agreement
  • A Certificate of Incorporation

Private or Public Limited Company

Two or more people can start a Private Limited Company, where the ownership is closely held amongst the directors. Whereas a Public Limited Company requires a minimum of seven members to set up. The ownership of the business is open to the general public via the sale of stock options, which are traded via the stock exchange.

There are many other differences with respect to regulations and operations. However, for the purpose of a bank account, the list of documents is quite similar.

  • Certificate of Incorporation
  • Memorandum and Articles of Association
  • Board resolution to open and operate the bank account, and for activities as specified in the application form of the bank
  • The latest list of directors
  • A company search of the file at Company Registry
  • Certificate of Commencement of Business (for public limited companies).

The exact list of documents can vary from bank to bank, but it is best to go prepared with all the basics in place. You can then get the exact requirements from the bank in question before initiating the banking process. If you are approaching a payment gateway, they may ask you for these documents too.

Skip the paperwork!

At Instamojo, we like to keep the paperwork to a bare minimum. You don’t need to submit any papers if you want to collect payments under Rs.10,000 a month. If you wish to remove limits, all you have to do is submit your pan card, bank statement and a business certificate, and you’re done.

Get started with Instamojo in minutes.


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5 comments
  1. Thankyou so much sharing such useful information. this article has helped me a lot in resolving my confusion on partnership. keep writing and sharing such articles.

  2. For partnership firm both partnership deed and registration certificate is required or just partnership deed will do?
    As its not necessary to register a partnership firm.

    1. Depends on who (bank/payment gateway) is requesting the KYC documents and what they need according to their compliance regulations. We request you to consult a legal advisor for this.

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