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NBFC Registration

A Non – Banking Finance Company, which is popularly known as the NBFC Company, is a company registered under the Companies Act, 2013 (earlier Companies Act, 1956) engaged in the business of providing loans and advances, acquisition of shares/ stocks/ bonds/ debentures or other securities issued by Government or local authority from time to time or other marketable securities of a like nature, Leasing, Hire-Purchase, Insurance Business, Chit Business.

NBFC REGISTRATION

 

 

Basic information:

 

 

A Non – Banking Finance Company, which is popularly known as the NBFC Company, is a company registered under the Companies Act, 2013 (earlier Companies Act, 1956) engaged in the business of providing loans and advances, acquisition of shares/ stocks/ bonds/ debentures or other securities issued by Government or local authority from time to time or other marketable securities of a like nature, Leasing, Hire-Purchase, Insurance Business, Chit Business.

 

However, NBFC is not allowed to carry any activity of agriculture, industrial and also can not do business of purchase – sale of any goods (other than securities) or providing any services and sale/ purchase/ construction of immovable property.

 

A Non-Banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a Non-Banking Financial Company (Residuary Non-Banking Company).

 

As per the provisions of Section 45-IA of the Reserve Bank of India Act, 1934, no Non-banking Financial company can commence or carry on business of a non-banking financial institution without a) obtaining a certificate of registration from the Bank and without having a Net Owned Funds of INR. 25 lakhs (Which was INR. 2 Crore Since April, 1999 till present time).

 

NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:

 

                  1. NBFC cannot accept Demand Deposits;

 

                  1. NBFCs do not form part of the Payment and Settlement System and cannot issue Cheques drawn on itself;

 

                  1. Deposit Insurance Facility of Deposit Insurance and Credit Guarantee Corporation (DICG) is not available to depositors of NBFCs, unlike in case of Banks.

 

LEGALRAJ will professionally assist you in registration of your NBFC Company. The average time taken to NBFC Company Registration is about 60 to 75 working days, subject to submission of necessary information and documents required by us from the client and the time taken by the Reserve Bank of India for approval.

 

 

What are the categories of Non-Banking Financial Company (NBFC) ?

 

  1. Deposit taking NBFC’s
  2. Non-Deposit taking NBFC’s
  3. Asset Finance Company
  4. Investment Company
  5. Loan Company
  6. Infrastructure Finance Company
  7. Infrastructure Debt Fund
  8. Micro Finance Institution
  9. Factors

 

 

What are the documents required for registration of NBFC ?

 

 

  1. Incorporation Certificate of Company or LLP

 

  1. The MoA and the AoA of the applicant company or LLP Agreement of the LLP

 

  1. Registered office ownership documents and the address proof of the company or LLP

 

  1. List of Directors or Partners including Designated Partners of the Company or LLP

 

  1. Financial Statements of the company or LLP duly audited of previous 3 consecutive financial years (for existing Company or LLP)

 

  1. Board or Partners’ Resolution authorizing for NBFC registration (for existing Company or LLP)

 

  1. Bank Account statement with a minimum paid up equity share capital of INR. 2 Crores

 

  1. Income tax PAN or the Company or LLP

 

 

What will you receive in Registration of NBFC package ?

 

 

  1. Preparation of documents related to NBFC
  2. Govt. fees payment
  3. Making an application and filing documents with the RBI office, Mumbai
  4. RBI Approval for NBFC Company
  5. Certificate of registration of NBFC Company

 

 

What is the process for Registration of NBFC ?

 

 

Step 1: Receipt of inquiry from you

 

Step 2: We provide you the list of details required

 

Step 3: You provide us with all the details required and make advance payment of our fees

 

Step 4: We start working for the registration of your NBFC Company

 

 

How we help in Registration of your NBFC Company ?

 

1. Consultation: We will review the proposed business activity, collect the documents from client, provide necessary incorporation documents for the NBFC Company registration and complete the procedure related thereto.

 

2. Board & Members Resolutions: We will provide timelines, documents and do the compliances for you.

 

3. Filing: We will timely file the incorporation documents and application, with the jurisdictional Registrar of Companies (RoC) and the for approval from the Jurisdictional Branch of the Reserve Bank of India.

FAQ

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property.

An NBFC incorporated under the Companies Act, 1956 or Companies Act, 2013 willing to commence a business of non-banking finance should comply with the following RBI guidelines: It must be registered under Section 3 of the Companies Act, 2013 or the Companies Act, 1956.

A Company Registered in India (Private Limited Company or Limited Company) and the company must have a minimum Net Owned Fund of Rs. 200 lakhs.

Various types of NBFC are Asset Finance Company, Investment Company, Investment Company, Infrastructure Finance Company, Housing Finance Company, Micro Finance Company etc.

RBI mandated requirement of submission of Income Tax Returns, ROC Returns, Statutory Audit, Tax Audit, various NBS returns for Deposit accepting and non-deposit accepting companies are some of the most important statutory compliances.

The general rule is that all NBFC’s are barred from accepting demand deposits that include savings and current account.Only NBFC’s which have special authorization from the Bank and have an investment-grade are allowed to accept and hold deposits up to 1.5 times of its Net Owned Funds.