August 31, 2010

The Chairmen and Chief Executive Officers

All Scheduled Commercial Banks excluding  RRBs/
All India Financial institutions/ Local Area Banks

Dear Sir,

Know Your Customer (KYC) guidelines – accounts of proprietary concerns

Please refer to our circular DBOD.AML.BC.No. 80/14.01.001/2009-10 dated March 26, 2010 advising banks to lay down criteria in their  customer identification procedure for opening accounts of proprietary concerns.

2.  In this connection, it is clarified that in addition to the documents listed in paragraph 2(i) of our circular referred to above for opening a bank account in the name of a proprietary concern, banks may also accept any registration/licensing document issued in the name of the proprietary concern by the Central Government or State Government Authority/Department.  Banks may also accept IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT as an identity document for opening of bank account.

Yours faithfully,

(Vinay Baijal)
Chief General Manager

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No registration is required for a sole proprietorship. You simply have to open a bank account with the name & style you want to work. But if you are liable for state VAT or service tax registration, then you have to obtain VAT and/or service tax registration. Further, for sole proprietorship, no separate income tax PAN is required. The PAN of the proprietor will be the PAN of the firm and proprietor will have to file income tax return in his personal name.