When an individual does a business in the name of one person only, it is called as a sole proprietorship. Proprietorships are not the registered business hence they fall under the category of the unregistered business. They are not registered under Central Government. They work as an independent business entity. The business of proprietorships are most suitable for very small business which are there in the unorganised sector. The business in the unorganised sector does not usually have an annual turnover of more than that of Rs. 10 lakhs. Usually, in many cases, the sole proprietor operates a business in different business name, for instance, Gupta Groceries, Amrit Stationery, Aggarwal Sweets etc. the business of the sole proprietors are not strictly verified or controlled and most of the entrepreneurs adopt the business name which is very common and hence not infringing on any of the popular trademarks. It has been discussed in detail in the article.


There have been certain norms and guidelines that are being laid down by The Reserve Bank of India. The KYC which is known as Know Your Customer norms have been established in order to open a bank account in the name of the sole proprietor. KYC is a process by which banks obtain necessary information about the identity and the address of the customers. It actually helps the bank to ensure that the services of the bank are not misused and not used to serve one’s personal interests as frauds are so common. The following procedure has been prescribed by the RBI for the banks to follow and adopt as KYC norms for opening a sole proprietorship current account:

  • PROOF PERTAINING TO THE NAME, ADDRESS AND THE ACTIVITY OF THE CONCERNED PERSON- The proof of name, address and the activity of the individual concerned is required which could be a registration certificate(in the case of the registered person), certificate/license that is required to be issued by the Municipal authorities under the Shop and Establishment Act, sales and income tax returns, CST/VAT certificate, certificate/registration document which issued by Sales Tax/ Service Tax/ Professional Tax authorities. 
  • NON-PRIMARY PROOF- The person is required to present any registration/licensing document issued by the Sales Tax/ Service Tax/Professional Tax authorities, license issued by the Registering authority concern by the Central Government or State Government Authority / Department. NBFCs/RNBCs may also accept IEC which is also known as Importer Exporter Code issued to the proprietary concern by the office of DGFT as an identity document for opening of account.
  • The complete Income Tax return and not just the prior acknowledgement has to be presented in the name of the sole proprietor where the firm’s income is reflected which has to be duly authenticated/ acknowledged by the Income Tax Authorities.
  • Utility bills such as electricity, water, and landline telephone bills in the name of the proprietorship concern is required for the purpose. 

However, any two of the above documents would be sufficient for the purpose of opening of sole proprietorship current account. The Reserve Bank of India’s KYC norms also mention that these requisite documents have to be in the name of the proprietorship only. 


On the basis of the guidelines issued by the RBI, there are various banks which have enacted procedures and list of documents required for opening a current account in the name of a Sole Proprietorship firm. There is a list of bank of documents which required for opening Proprietorship Bank Account:


  • Any of the certificate which is issued for registration/operations/Trade License/business by Local/ State/ Central Government/ Government Agency/ SEBI/ IRDA/ ICAI/ ICSI/ ICWAI/ Office of Registrar of Newspapers for India in the name of entity/firm. Eg: Sales Tax, TIN/ VAT/ etc.
  • An APMC/ Mandi License/ Certificate
  • Labour License/Certificate
  • Professional Tax Registration Certificate
  • Trade Mark Registration Certificate
  • Liquor License or Registration Certificate
  • Drug License
  • Registration Certificate issued by Excise & Customs Department.
  • License/ Certificate to Sell/ Stock/ Exhibit for Sale or Distribute Insecticide/Pesticide
  • Registration Certificate issued under Weight & Measurement Act
  • Police Department Permission/License/Certificate
  • Regional Transport Office Permit/Registration Certificate
  • The Consent to Operate document issued by State/Central Pollution Control Board
  • Sales Tax Registration Certificate/ TIN Certificate/ VAT Certificate/ Service Tax certificate/ TAN certificate.
  • Valid Shops & Establishment Certificate/ Trade License. However the validity can be extended up to the grace period for renewal as mentioned in such certificate.
  • Certificate Issued by SEZ, STP, EHTP, DTA and EPZ in the name of the entity mentioning the address allotted.
  • Importer–Exporter Code Certificate along with PAN Card (if PAN is quoted on the IEC Certificate).
  • Gram Panchayat Certificate which should be on letterhead and not more than 3 month old.
  • Trade License in the name of entity.
  • District Industries Center / Small Scale Industries Certificate – Acknowledgment Part -II issued by DIC/ SSI containing Entrepreneurs Memorandum Number which should be  duly stamped and signed by issuing authority.
  • Factory Registration Certificate in the name of entity.
  • SEBI Registration Certificate in the name of the entity.
  • Certificate of enlistment/license/shop allotment letter issued by Municipal Corporation.
  • Shops & Establishment Certificate issued by E-Seva Kendra,Andhra Pradesh and the receipt issued only by Municipal Corporation of Hyderabad (MCH) to be accepted along with Shops & Establishment Certificate.
  • The Shops and Establishment Certificate issued by the Municipal Corporations in West Bengal are valid till March 31 every year.

However, any one of these documents are required. 


The second sole proprietorship proofs are as follows and any one of them are mandatory.

  • The registration of firm with Employee Provident Fund Organization.
  • The registration of firm with Employee State Insurance Corporation.
  • Letter or Certificate which should be on letterhead and not more than 3 month old confirming existence of business issued by Chairman/ President/ CEO/ Head of the Nagar Panchayat/ Parishad, and not by local councillors/ corporators
  • Complete Sales tax return in the name of the firm duly acknowledged. The portion of the sales tax return showing the name of the firm, however, should be duly acknowledged by the accepting authority
  • The last available Income/ Wealth Tax Assessment order in the name of firm.
  • The latest copy of Electricity Bill which should  not be more than 3 months old.
  • Latest copy of Telephone Bill from Telecom operator which should not be more than 3 months old.
  • A certificate which has to be issued by Municipal Corporation/ Local Self Government Bodies confirming address of the firm.
  • The true copy of gas connection book in the name of entity along with latest gas receipt which should be not more than 3 months old or Gas bill in case of pipe connection.
  • Water Tax bill paid to Municipal Body/ Corporations, not more than 6 months old along with the Tax receipt should stand in the name of the firm.
  • Property Tax bill should not be more than calender one year old from the bill issuance date along with Tax receipts for property tax paid to Municipal Body / Corporations. The Tax receipt should stand in the name of the firm.
  • Certificate of Verification issued under Weight & Measurement Act. This particular document will not be considered if Registration Certificate issued under the same act has been taken as 1st entity proof document.


The following are the required identity proofs out of which only one is mandatory.

  • A Pan Card in the sole proprietor is mandatory
  • Voter Identity Card that is the Election Card
  • Driving License
  • Aadhaar card issued by Unique Identification Authority of India 
  • Senior Citizen Card issued by State/Central Govt
  • Fisherman Identity card issued by State/Central Government
  • Arms License


The following are the sole proprietorship address proofs of which only one is mandatory.

  • Passport
  • Voter Identity Card
  • Driving License
  • Aadhaar card issued by Unique Identification Authority of India Senior Citizen Card issued by State/Central Govt
  • Fisherman Identity card issued by State/Central Government
  • Arms License
  • Utility bills such as Electricity bill, Telephone bill which should not be older than 3 months
  • Water tax bill along with receipt which should not be older than 6 months
  • Property Tax bill which should be less than one year old along with Tax payment receipts
  • A latest Three months Bank Statement from scheduled commercial bank with account opening cheque/Bank passbook/Original letter from existing banker with account opening cheque
  • Consumer gas connection card/Passbook along with the receipt of gas supply which should not be older than 3 months
  • Registered Lease & Licence Agreement along with utility bill which should not be older than 3 months in the name of the landlord

With respect to the above documents and information, a Banker can open a current account in the name of the Sole Proprietorship Business. 


When somebody registers as a sole proprietorship one is, in most cases, registering a name other than that of one’s own. If an individual wishes cheques to be made out in the name of a sole proprietorship, then he/she has to open up a separate account. Otherwise, the bank did not accept cheques. If the person is operating a sole proprietorship under his/her own personal name then s/he can operate out of a personal account.

Sometimes there may be a benefit to having a separate account set up so that one can keep track of deposits and withdrawals and other important details relating specifically to that business.

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