Amount paid to a friend as drawings from a Propritory Business Concern
2 months ago
Can a Proprietor give money to his friend from his business's Bank Account as his drawings
A.Dear Client,
A Current account, commonly known as a business account, is a type of bank account designed for businesses, corporations, and trusts with a high volume of transactions. It is not intended for direct personal transactions. To manage personal expenses, one should initiate a funds transfer from the current account to a savings account, often referred to as drawings. This allows the use of the transferred funds for personal purposes. In a proprietorship, distinguishing between personal and business transactions can be challenging without clear demarcation. It is advisable for business owners to determine their business's profit or loss for their own benefit. While occasional personal transactions in a current account may go unnoticed, frequent occurrences may prompt the bank to advise against such practices, as they can impact the financial health of the business.
A Current account, commonly known as a business account, is a type of bank account designed for businesses, corporations, and trusts with a high volume of transactions. It is not intended for direct personal transactions. To manage personal expenses, one should initiate a funds transfer from the current account to a savings account, often referred to as drawings. This allows the use of the transferred funds for personal purposes. In a proprietorship, distinguishing between personal and business transactions can be challenging without clear demarcation. It is advisable for business owners to determine their business's profit or loss for their own benefit. While occasional personal transactions in a current account may go unnoticed, frequent occurrences may prompt the bank to advise against such practices, as they can impact the financial health of the business.
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A.Dear Client,
A business account in a Bank typically known as a Current account is a kind of bank account maintained by businessmen, corporations and trusts who have a large number of transactions. A current account should not be used for personal transactions directly. First, you have to transfer some funds from the current a/c to a savings account, which we generally call drawings. Now you can use the transfered funds for personal purposes. In a proprietary business, the distinction between personal/business is difficult to distinguish unless you make a clear demarcation. It's in your own interest, it's better to arrive at your business loss/profit. Stray transactions of such nature in a current account normally do not get noticed, but where often such things happen, the Bank may suggest you desist from such practices that may affect the financial health of your business.
A business account in a Bank typically known as a Current account is a kind of bank account maintained by businessmen, corporations and trusts who have a large number of transactions. A current account should not be used for personal transactions directly. First, you have to transfer some funds from the current a/c to a savings account, which we generally call drawings. Now you can use the transfered funds for personal purposes. In a proprietary business, the distinction between personal/business is difficult to distinguish unless you make a clear demarcation. It's in your own interest, it's better to arrive at your business loss/profit. Stray transactions of such nature in a current account normally do not get noticed, but where often such things happen, the Bank may suggest you desist from such practices that may affect the financial health of your business.
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