The specific KYC rules for different entities outlined in the guidelines ensure that the Reserve Bank of India (RBI) maintains transparency and prevents financial misuse. Here’s a detailed explanation:

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1. For Sole Proprietary Firms

• Along with verifying the identity of the proprietor (as an individual), banks must collect two of the following documents as proof of business:
• Registration certificate, including Udyam Registration Certificate (URC).
• License issued under the Shop and Establishment Act.
• GST/VAT certificates.
• Sales and income tax returns.
• Proof like Importer Exporter Code (IEC) from the DGFT.
• Licenses from professional bodies (e.g., lawyers, accountants).
• Utility bills related to the business.
• Relaxation: If it’s difficult to provide two documents, the bank can accept one, but must verify the firm’s address and activity via other methods.

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2. For Legal Entities (Companies)

To open an account, banks need:

• Certificate of Incorporation and Memorandum/Articles of Association.
• Permanent Account Number (PAN) for the company.
• Board Resolution authorizing specific individuals to operate accounts.
• Identification and verification of:
• Managers, directors, or employees authorized to manage finances.
• Beneficial owners holding more than 10% ownership in the company.

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3. For Partnership Firms

• Required documents include:
• Partnership Deed and Registration Certificate (if applicable).
• PAN of the partnership.
• List of all partners and their identification.
• For operation, banks identify beneficial owners who control more than 10% of profits or capital.

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4. For Trusts

• The following documents are necessary:
• Trust Deed and Registration Certificate.
• List of trustees, beneficiaries (with >10% share in trust assets), and settlors.
• PAN or Form 60 for tax compliance.
• Banks must conduct detailed scrutiny, ensuring trustees act in compliance with the trust’s purpose.

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5. Unincorporated Associations/Bodies

• Examples include societies or clubs. Documents required:
• A resolution from the managing body authorizing financial actions.
• Proof of legal existence, such as registration documents.
• Identification of those authorized to act on the body’s behalf.
• PAN/Form 60 submission.
• Societies, which fall under this category, must prove ownership or control for any assets exceeding 15%.

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6. For Juridical Persons (e.g., Universities, Panchayats)

• Additional documents like:
• A document naming the individual authorized to operate the account.
• Legal documents supporting the establishment of the juridical entity.
• Includes KYC checks for the person authorized to act on behalf of these entities.

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Key Checks Across All Entities:

1. Beneficial Owners:
   • Banks must identify individuals who directly/indirectly control more than 10% of a firm’s/company’s ownership or profits.
2. Foreign Nationals:
   • For foreign nationals or institutions, documents from their respective governments or embassies are acceptable.
3. Politically Exposed Persons (PEPs):
   • Accounts of PEPs or their families need higher scrutiny with senior management approval.

These requirements ensure that each entity is verified thoroughly to avoid risks of fraud or money laundering.