Looking to understand what basic KYC documents your business needs to produce when approaching\u00a0a bank? Let’s find out.<\/p>\n
Every business entity needs to comply with certain laws and regulations. KYC or \u2019Know Your Customer\u2019<\/strong> 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.<\/strong><\/span><\/p>\n Know Your Customer (KYC)<\/strong>\u00a0is a mandatory RBI process that was incorporated by the banks to prevent any kind of financial fraud.<\/p>\n This helps banks get to know their customers better<\/strong> and help manage risks and protect them from financial crimes like money laundering, identity theft, and terrorist financing.<\/p>\n Related read:\u00a05 ways to identify fraud loan apps and avoid losses for small businesses<\/a><\/strong><\/p>\n List of specific KYC documents may vary from bank to bank depending on the constitution of your business entity, which could be –\u00a0<\/strong><\/p>\n Let\u2019s take a look at a list of common requirements for individuals connected to the business:<\/strong><\/p>\n In addition to one of these above documents, you will have to furnish your latest passport size photos.<\/strong> The number of copies will be specified by the bank you are looking to transact with. <\/span><\/p>\n Related read:\u00a0 5 Important Tips for KYC Documents You Still Do Not Know<\/a><\/strong><\/p>\n When an individual owns, manages, and controls the business, it is known as a sole proprietorship entity. <\/span><\/p>\n The individual and the business are considered a single entity. Therefore, there are very few regulatory requirements for an individual setup. Any one of the following documents for KYC will do for a business account.<\/strong><\/span><\/p>\n 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. <\/span><\/p>\n Although it is not very different from a sole proprietorship, the responsibilities, profits, or losses are shared on a pre-decided basis and also, explicitly stated in a partnership deed<\/a>.<\/strong><\/span><\/p>\n 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.<\/span><\/p>\n 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: <\/span><\/p>\n Two or more people can start a Private Limited Company,<\/strong> wherein the ownership is closely held amongst the directors. <\/span><\/p>\n However, a Public Limited Company requires a minimum of seven members to set up. The ownership of the business is open to the general public with the sale of stock options, which are traded via the stock exchange.<\/span><\/p>\n There are other differences with respect to regulations and operations. <\/span><\/p>\n However, for the purpose of a bank account, the list of documents is quite similar.<\/strong><\/span><\/p>\n 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.\u00a0<\/span><\/p>\n 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.<\/strong> If you wish to remove limits on your online store, all you have to do is submit your pan card, bank statement and a business certificate, and you’re done.<\/p>\n Related read: How to update KYC on Instamojo in 2021<\/a><\/span><\/strong><\/p><\/blockquote>\nWhat is KYC document?<\/strong><\/h2>\n
Why do businesses need KYC documents?\u00a0<\/strong><\/h2>\n
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5 KYC documents you need for your business<\/strong><\/h2>\n
1. Proof of Identity<\/strong><\/h3>\n
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2. Proof of Address<\/strong><\/h3>\n
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Some specific documents required based on business composition<\/strong><\/h2>\n
Sole proprietorship<\/strong><\/h4>\n
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Partnership Firm<\/b><\/h4>\n
Limited Liability Partnership (LLP)<\/b><\/h3>\n
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Private or Public Limited Company<\/b><\/h3>\n
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How to resubmit KYC with Instamojo<\/strong><\/h2>\n