Get to know about the steps of the GST registration process
29 Jul, 2024
The word Microfinance Company (MFC) refers to an organisation that provides financial aid and support to persons in rural areas, low-income groups, and underdeveloped areas of society. The primary goal of this business strategy is to provide financial services to people from all walks of life. To start an MFC in India, you must first get a Microfinance Company Registration from the Reserve Bank of India.
Microfinance allows poor people to become entrepreneurs and improve their living standards by providing financial aid. Because most microfinance organisations offer loans with no collateral, the options for starting a business are more flexible. The MFI assists the following member in improving their living conditions:
Because the interest rates on these loans are lower than those offered by traditional lenders, defaulting on the loan is uncommon. As a result, for many poor people, a microloan is an obvious way out of a weak financial background.
Due to the rising level of poverty, education is being avoided due to the accompanying expenditures. Microloans help people's livelihoods become more solid, and their savings options expand. Individuals may generate opportunities for future investment, higher education, and health care by saving.
Microfinance assists individuals in starting businesses that lead to job prospects. Increased labour aids an individual's productivity and income stability.
To register a Microfinance Company as a Non-Banking Financial Company, the applicant must first form a company under the Companies Act 2013, either as a Private Limited or Public Limited Company.
Following that, the stated applicant firm must follow all of the processes necessary to gain microfinance company registration, starting with the minimum capital required and ending with the official filing of the registration application with the Reserve Bank of India's regional office.
To start a Microfinance Company as a section 8 company in India, the applicant company must first apply for the Digital Signature Certificate and Directors Identification Number for all prospective directors.
Following that, it must submit an application for the approval of Name in Form INC – 1. It also necessitates the preparation of the Memorandum of Association and Articles of Association for the aforementioned business, as well as the submission of INC – 12 together with the necessary documentation in order to acquire a Microfinance Company Registration.
The process for obtaining a microfinance company registration in India involves the following steps:-
The applicant must first register a company under the Companies Act 2013, which is the first and most important stage in the process of acquiring Microfinance Company Registration in India.
In addition, the applicant must complete a SPICe + Form with the Ministry of Corporate Affairs (MCA) in order to be incorporated.
The Ministry of Corporate Affairs repealed the minimum capital requirement for forming a company in India with the Companies (Incorporation) Act 2015.
Under the applicable MCA services, the candidate must select the SPICE+. The applicant will then be sent to another website where he or she must submit a fresh application.
If the company requesting for Microfinance Company Registration already has a name, the applicant must use the auto check to meet the requirements for the company's name.
Additionally, all additional information pertaining to the company's name must be provided.
In addition to the above-listed details, the following information must be submitted:
The applicant company must also obtain a specified amount of capital according to the requirements in the next step of the Microfinance company registration procedure.
The directors of the applicant company would need to activate a current bank account as the next stage. A certificate stating that no lien has been established will also be necessary for the above-mentioned procedure. For this kind of certificate, an application will be sent to the Apex Bank's regional office.
Then, at the Reserve Bank of India's regional office, all certified copies of the paperwork necessary for obtaining microfinance company registration must be presented.
The below are the documentation and certified copies that must be filed with the RBI regional office:
To get Microfinance Company Registration in India, the applicant must now complete an online registration application with the Reserve Bank of India. The applicant will then be given a Company Application Reference Number for future use.
The applicant must submit the hard copies at the regional office of the Reserve Bank of India in the last step of the Microfinance Company Registration procedure. Following submission, the Reserve Bank Of India will conduct a review and due diligence procedure to ensure that the company has met all of the criteria.
The documents required for Microfinance Company Registration:
It should also be noted that the application firm must provide all essential documents, which must be no more than two months old.
A microfinance company is distinct from the Section 8 company because it is a Non-Deposit Taking NBFC. The Reserve Bank of India Act 1934 and the orders issued by it control and regulate the activities and affairs of a Microfinance Company.
Online legal India provides you with all types of company registration in India and it is a one-stop solution for company-related matters. Our experts are here to help you out for a better experience.
Get to know about the steps of the GST registration process
29 Jul, 2024
How to do Trademark Registration in India?
02 Jul, 2024
How to apply Trademark Registration
27 Jun, 2024
Trademark Name Search Done With Ease and Convenience
21 Jun, 2024
Trademark Registration Sites where you can register your mark!
15 Jun, 2024
Consumer Complaint against Tamil Nadu Electricity Board TNEB
30 Nov, 2020
How to Take Legal Action against Mental Harassment in India?
07 Nov, 2020
UPPCL Uttar Pradesh Power Corporation Ltd. Complaint Filing
19 Nov, 2020
How to File a Complaint Online in Consumer Court in India
27 Nov, 2020
Online Complaint Filing against Hero Motocorp
04 Dec, 2020