Microfinance Company Registration: To be registered as an NBFC microfinance company, the first step is to form a private or public company.
Registration of microfinance companies under section 8 is the most suitable option when you want to start a finance business across India without RBI approval and capital restriction.
Section 8 microfinance companies can be started with microfinance objects for social objects to help poor people to reduce poverty. Such companies are exempted to get a license from RBI under its master circular RBI/2015-16/15 DNBR (PD) CC.No.052/03.10.119/2015-16 Dated July 01, 2015.
Micro Financing In India can offer for unsecured loan i.e., personal loan, group loan, loan for household, etc. at the interest rates as specified by the RBI norms (currently it is 26% p.a.) The main object of the section 8 microfinance company is to reduce the poverty in the country, therefore it facilitates the loans hassle-free without more paper works and procedures.
The loan limit is Rs. 60,000 in the first cycle and Rs.1,25,000 in subsequent cycles. The total ineptness of the loan shall not be expressed from 1 lac at a time
Registration of section 8 microfinance companies can be easily done with VAKILKARO with legal expertise. It is totally online process, which started with two (2) Natural persons. The Ministry of Corporate Affairs (MCA) has given the power to the Registrar of Companies (ROC) to issue the License of section 8 microfinance Companies, which takes 7 days estimated. Vakilkaro has the legal expertise in Registration, Legal Compliance, Loan Agreement Drafting, and Loan Recoveries of microfinance companies as well Finance Companies like NBFCs.
Section 8 Microfinance Company is exempted to get the license from RBI vide notifications no.
Section 8 microfinance companies have the special advantage to provide unsecured loans across India. i.e., personal loan, group loan, etc.
Like Nidhi Company, section 8 microfinance company have no jurisdictional or working area restrictions. In simple, section 8 microfinance companies can be operated across India.
Company registered u/s 8 of the companies act, 2013 have its objects of social and welfare purposes, with microfinancing, therefore, section 8 company also known as a non-profit company.
Microfinance company may offer an attractive rate of interest on a loan provided, which can be up to 26 % p.a. on reducing value.
Documents required to register Section 8 Micro Finance Company
PAN CARD of 2 persons is mandatorily required and in case of the foreign national valid passport also requires.
Any proof of identity like the Aadhaar Card/ voter id card/driving license of all 2 persons is mandatorily required.
The client has to be provided at least two Company names to apply for name approval.
All the 2 persons must have their photos, mobile numbers, valid emails, and latest bank statements (must not be older than 2 months).
The client has to provide Office Address proof like Rent Agreement/Property papers with the latest electricity bill.
The process to register a Section 8 Micro Finance Company in India
Compare different business structures to choose the right entity type
There are two types of companies as per its nature i.e. private limited and limited. A section 8 company can be registered as private limited company or public limited.
There is no bar by law for minimum and maximum capital, you can start with Rs. 10,000 as well.
A section 8 company can be registered as company with limited by shares or by guarantee (with and without share capital).
Yes, according to provisions of the Companies Act, 2013 allows persons or associations of the person to be register as a section 8 company to fulfillment of particular conditions for it.
Yes, it is necessary to have non -profit object of the section 8 company.
Yes, the companies registered under section 8 having micro finance object, can do finance activities for social purpose to reduce poverty. The RBI has exempted such companies vide its master circular to getting the license from RBI.
No, you can start without taking of GST Certificate.
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