Who can open a joint Current Account?

6 MinsNov 30, 2021

Ajay and Salim are friends who want to start a catering business together. They are clear that to avoid any misunderstanding on financial issues, both of them should have signing rights as far as their business’ bank account is concerned. At the same time, they don't want to get into the hassles of forming a partnership firm or a private limited company.

joint current account


So, what are the options for Ajay and Salim? They should open a joint Current Account. This is suitable for professionals like them and also gives them equal control over their finances. Let us understand how the process works.

Why do Ajay and Salim need a Current Account?
Business accounts are usually Current Accounts. Generally, there are a lot of payments coming in and expenses being paid while running a business. Current accounts are designed in a way where daily business transactions can be carried out efficiently. Regular savings account have limits on the number of free deposits and withdrawals one can make. For current accounts, the limits are higher, even unlimited in some cases. Even cashless transactions such as RTGS, NEFT, etc. are unlimited in some variants. Many banks also offer multi-city services for their current account holders, which is why it makes sense for Ajay and Salim to open one.

Current accounts can be opened for a variety of customers:

  • Individuals (for resident Indians only)
  • Sole proprietorship firms (for individuals running a business)
  • Hindu Undivided Families (HUFs)
  • Partnerships/Limited liability partnerships
  • Private limited companies
  • Other organisations, businesses, and institutions can also open current accounts

What is the best option for Ajay and Salim?
Ajay and Salim should open a Current Account for Sole Proprietorship Firms. This type of Current Account can have one or multiple signatories. For opening the account they require the following documents:

  • Shop and Establishment Act certificate/license
  • GST certificate
  • Utility bills for the office/establishment
  • FSSAI certificate in the case of food business, IEC (Importer Exporter Code) if they start an import-export business
  • Identity and address proof of the owners: Passport, driving license, Aadhaar card and PAN card

[Also Read: 8 Key Factors to Look at Before Opening a Current Account]

In future, if they decide to open a partnership firm, in addition to the above-mentioned documents, Ajay and Salim would also have to provide the following documents: 

  • Partnership deed
  • Partnership PAN
  • IT returns of Ajay or Salim
  • Certificate of Incorporation and LLP agreement in case of a limited liability partnership

How to open a joint current account online?
Most banks have the option of filling up an application form and submitting documents online. For instance, Axis Bank offers the option of opening a Current Account online, through an end-to-end digital process, where the verification is done through video-KYC. This makes the account opening process seamless. 
Once Ajay and Salim submit their account opening form online, a customer care executive will reach out to them and guide them on the next steps. An official from the bank may visit their home or premises to collect documents. Once that is done, the account is activated and operational.

Joint Current Account Operating options:
When Ajay and Salim open their account, they will have the following options:

  • Either (or) Survivor: Either Ajay or Salim can operate the account in this type of joint account (the most common one)
  • Former (or) Survivor: In this type of account, one is designated as the sole operator of the account. In case the primary holder dies, the survivor can operate the account
  • Jointly (and): In this type of account, signatures of both account holders are needed for any transfers in and out of the account
  • Jointly (or) Survivor: In this type of account, signatures of both account holders are needed for any transfers in and out of the account. However, in case of the death of one of the account holders, the survivor can operate the account

Axis Bank offers a wide range of current account options designed to meet your business needs. Each of these current accounts comes with a host of benefits.

Disclaimer: The Source, a content creation and curation firm have authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.