To start a microfinance company, authorize it from the RBI. For it, decide whether it should be a non-banking finance company or the Section 8 company.
This company is authorised by the Reserve Bank of India. Being so, the RBI offers some exemptions to perform financial activities up to a certain limit. Entrepreneurs can have microfinance company registration done in two different ways.
Non-Banking Finance Companies (NBFC) duly registered with RBI
Section 8 companies (companies formed under Section 8 of the Companies Act 2013)
If you go with the first option, the first step would be to set up a private or public company. For a private company, you need at least 2 members and INR 1 lakh as capital. Besides, it also requires a minimum of 7 members. This company can raise a net worth of INR 5 crore and for the northeastern region of India, this amount is INR 2 crore. Then, a fixed deposit should be there in the bank. After that, a No Lien Certificate should be obtained. To run this company, the NBFC must fill out an application online for the licence, which requires the verification of certified documents. These documents must be submitted to the regional office of the RBI.
• Memorandum of Association and Articles of Association
• Incorporation certificate of the company
• Board resolution copy
• Copy of Auditor’s report of receipt of fixed deposit receipt
• Banker’s Certificate of No Lien stating the net owned fund
• Banker’s report about the company
• Recent credit report of the directors
• Net worth certificate of the directors
• Education/professional qualification proof of the director
• KYC and income proof of the director
• Proof of work experience in the financial sector
• Structure plan of the organization
For a Section 8 Company, you need to apply for Digital Signature Certificate (DSC) and Director Identification Number (DIN) online. Simultaneously, get its name approved in Form INC-1, which should be Sanstha, Foundation, or Micro Credit in its name. Then, file the Memorandum of Association (MOA) and Articles of Association (AOA) with the necessary documents, which can be the following:
• PAN Card copy of all directors/promoters
• Documents for identity proof
• Documents for address proof
• Photograph of all directors/promoters
• Proof of ownership of registered office or rental agreement for the same
• NOC from the owner
• Applicable stamp duty as mandated by the state
• Any other documents as required
Source: https://caaq.in/service/micro-financ...
