registration requirements for finance company
sanjesh prasad
(Querist) 19 December 2008
This query is : Resolved
what are the various registration requirements for a finance company.
Guest
(Expert) 22 December 2008
Minimum capital must be Rs.2 Crores.
Manish Singh
(Expert) 22 December 2008
you need to incorporate a company where the MOA should provide that the principal business should bbe the financial business. you must maintain the capital as stated by Mr. kotresh. also thenafter you need to be registered with the RBI and take permission from the same to carry on the business related to finances.
Manish Singh
(Expert) 23 December 2008
Dear Mr. Prasad,
In terms of Section 45-IA of the RBI Act, 1934, it is mandatory that every NBFC should be registered with RBI to commence or carry on any business of non-banking financial institution as defined in clause (a) of Section 45 I of the RBI Act, 1934.
However, to obviate dual regulation, certain categories of NBFCs which are regulated by other regulators are exempted from the requirement of registration with RBI viz. Venture Capital Fund/Merchant Banking companies/Stock broking companies registered with SEBI, Insurance Company holding a valid Certificate of Registration issued by IRDA, Nidhi companies as notified under Section 620A of the Companies Act, 1956, Chit companies as defined in clause (b) of Section 2 of the Chit Funds Act, 1982 or Housing Finance Companies regulated by National Housing Bank.
your work shall come under asset finance company.
AFC would be defined as any company which is a financial institution carrying on as its principal business the financing of physical assets supporting productive/economic activity, such as automobiles, tractors, lathe machines, generator sets, earth moving and material handling equipments, moving on own power and general purpose industrial machines. Principal business for this purpose is defined as aggregate of financing real/physical assets supporting economic activity and income arising therefrom is not less than 60% of its total assets and total income respectively.
A company incorporated under the Companies Act, 1956 and desirous of commencing business of non-banking financial institution as defined under Section 45 I(a) of the RBI Act, 1934 should have a minimum net owned fund of Rs 25 lakh (raised to Rs 200 lakh w.e.f April 21, 1999). The company is required to submit its application for registration in the prescribed format alongwith necessary documents for Bank’s consideration. The Bank issues Certificate of Registration after satisfying itself that the conditions as enumerated in Section 45-IA of the RBI Act, 1934 are satisfied.
Manish Singh
(Expert) 05 January 2009
in your case, you can take license under money lenders act of your state but in this case you ill not be allowed to take deposits from anyone.
