WANT TO EARN A STEADY INTEREST INCOME AND HELP NEEDY THE SAME TIME, THEN THIS IS FOR YOU
Microfinance Company Registration
Earn the most secure and steady interest income and help the needy by providing them short term credits through your own Micro Finance Company Registration.
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What is Micro Finance Company?
Online Micro-Finance (Section-8) Company Registration in India
It is a known fact that only 20.77% of the total population of the country has access to bank loan facilities due to reasons like lack of awareness among rural people, illiteracy, etc. Out of this 20.77%, only 8.63% are eligible for bank loans as the banks have very strict criteria for loan eligibility thus, depriving a large chunk of the population from the benefits of credit facilities from organized lending channels of the country. To provide easy and seamless access to the short term credit facilities to the poor and needy people of the country, the Government of India along with RBI has introduced the concept of Micro Finance Companies in India. The basic objective behind these companies is to provide short term credit facilities to that section of society which is either having no access to the banking channels or is ineligible to meet the hefty banking criteria.
There are 2 types of Micro Finance Companies which are popular in India:
1) Non Banking Finance Company- Micro Finance Institutions (popularly known as NBFC-MFI): This type of Micro Finance Company has to get itself registered with RBI separately. It also has to maintain a minimum Net Owned Funds (NOF) of Rs. 2 Crores to Rs. 5 Crores, depending on states to states.
2) Micro-Finance Company Registration: This type of Micro Finance Company is not required to register itself with the RBI and thus is not required to maintain a minimum NOF of Rs. 2 Crores.
We at Vakilgiri, helps our prospective clients to start their Micro Finance Business in no time. Though, we at Vakilgiri offers registration of both types of Micro Finance Companies (i.e., NBFC-MFI and Micro Finance Section-8 Company) but being a responsible and leading consulting firm in the market, we suggest that if our client is new in the field of micro-financing, he/she should go for the Micro Finance Section-8 Company as it has following advantages over the other type of Micro Finance Companies:
1) No Separate RBI approval
2) No requirement to maintain minimum Net Owned Funds (NoF) of Rs. 2 Crores
3) Easy and fast incorporation as compared to NBFC-MFI
4) Less cost of registration than in case of NBFC-MFI
5) Less legal compliances in comparison with NBFC-MFI
Vakilgiri a leading Business Consultant, offering quick Micro Finance Company Registration Service in India with five simple steps:
1) First and foremost, we will apply for your Digital Signature Certificate and Director Identification Number
2) Choosing a Unique Name for your Company.
3) Compiling Forms, Documents, AOA & MOA of your Company.
4) Filing e-forms with MCA.
5) Allotment of COI, PAN & TAN
Features of MicroFinance Sec-8
Features you can't resist
Separate Legal Entity
Just like any other company, Microfinance Section 8 Company, its directors and shareholders are distinct persons and have a separate identity Thus, their liabilities in the company are limited to the shares of the company held by them.
Loans to small business houses and to poors for dwellings
Section 8 Microfinance Company Registration in India provides unsecured loans to small businesses of upto Rs. 50,000/- & to poor people for their dwelling residence of upto Rs. 1,25,000/- thus helping in the upliftment of the poor & weaker sections of the society.
No prior RBI Approval
Unlike any other Micro Finance Companies, the Micro Finance Section-8 Company is not required to take any prior RBI approval/ registration. However, Micro Finance Section-8 Company is also governed by the RBI guidelines after its incorporation.
No Minimum Capital Requirement
The RBI has exempted the Micro Finance Company to have any minimum paid-up capital requirements which means, you can start your microfinance business with nominal amount.
Upliftment of weaker section of the society
Microfinance Company is incorporated with the objective to provide short term credit facilities to that section of society which is either having no access to the banking channels or is ineligible to meet the hefty banking criteria.
No Minimum Capital Requirement
The RBI has exempted the Micro Finance Company to have any minimum paid-up capital requirements which means, you can start your microfinance business with nominal amount.
Minimum Compliances
Microfinance Section-8 Company have the advantage of less legal compliances over the other type of micro finance companies.
Steady Source of Income
Microfinance Section 8 Company enjoys the benefit of having a steady income in the form of Interest income.
Earn interest upto 26% p.a
A Microfinance Section 8 Company can earn interest upto 26% p.a on loans advanced. Thus, it gives an additional edge to the Section 8 Micro FInance Companies over organised banking sector.
Documents Required For Micro-Finance
This is all we need from you
- PAN Card or Passport (Foreign Nationals & NRIs)
- Copy of Aadhaar Card
- Passport-sized Photograh
- Mobile Number & Email Ids
- 2 months latest bank statement/ telephone or mobile bill/ electricity or gas bill
- Latest Electricity Bill/ Mobile Bill for Registered Office
Check Company Name Availability
Our systems will check availability of your Company Name
Microfinance Company Registration Process
More simple than it looks!
1. Preprations of Digital Signature (DSC)
1st we apply for DSCs of all the Directors & members. Digital Signatures are required for signing all the documents while incorporating your Section 8 Micro Finance company.
2. Filing Application for Director's DIN
The next step is the application of Director Identification Number (DIN). It is the unique number allotted by the MCA to each of the directors of the Section 8 Micro Finance Company.
3. Choosing Unique Name
Meanwhile applying for your DSCs, we help you in selecting Unique Name for your dream Section 8 Micro Finance Company. This process completes in a single day.
4. Preparing Forms and Documents
After the approval of the Company’s name, we prepare all the e-forms and other documents.
5. Filing e-forms with MCA
After completing all the formalities and documentation work, we upload e-forms along with the attachments prepared in step-4 on the MCA portal for approval.
6. Allotment of COI, PAN & TAN
The department will allot Certificate of Incorporation for your Section 8 Microfinance Company along with company's PAN & TAN. You can now open Current Bank Account and start the operations. CONGRATULATIONS...
FAQ's
Few doubts important to be resolved quickly
In some of the cases, Micro Finance Company can charge upto 26% p.a on the money advanced by it.
The Micro Finance Company can charge processing fees maximum upto 1% of the gross loan amount sanctioned by it.
You can expect an annual expenditure of around Rs.25000 which involves 3 important aspects: Accounting & Auditing, Annual Compliance & Misc. Compliance expenditure.
A Micro Finance Section-8 Company can give only unsecured loan to small business houses of amount upto Rs.50,000/- and to the poor people for their dwelling residence of amount upto Rs.1,25,000/-
No, a Micro Finance Section-8 Company is not allowed to accept any kind of deposits from anyone.
No, Section 8 Micro Finance Company is strictly prohibited from accepting any kind of security against loan provided by it. It means that Section 8 Micro Finance Company is only allowed to extend unsecured loans to its borrowers.
No, Section 8 Micro Finance Company is strictly prohibited for charging any prepayment penalty on early repayment of the loan.
Registration of Micro Finance Company can be completed with just 2 members acting as the subscriber of its MOA and AOA.
No, Section 8 Microfinance Company registration process is a fully online process as all the documents and e-forms are to be filed electronically on MCA Portal. Thus, the physical presence of any of the directors or shareholders is not required at all.
The DSC is just like your ordinary signature having extra security features like encryption, etc. It enables you to sign the documents like PDF electronically.
MOA & AOA contains all the rules, vision and mission of your Section 8 Micro Finance company, and defines the exact roles and responsibilities of shareholders and directors.
There is no minimum paid-up capital requirements for the Incorporation of Section 8 Micro Finance Company as in the case of other Microfinance Companies. This means you can start a Micro Finance Company with a nominal amount.
No, Section 8 Micro Finance Company is not required to take any prior approval of RBI before starting its lending business. Thus, the Company can start its lending business as soon as it gets incorporated. However, Section 8 Micro Finance Company is required to comply with the RBI guidelines.
It is mandatory for the Section 8 Micro Finance Company to include the words foundation, Forum, Association, Federation, Chambers, Confederation, council, Electoral trust and the like etc.
Yes, some of the states provide privileged rates for stamp duty on MOA/ AOA of Micro Finance Companies or on increase in authorized share capital.
No relaxation of the special rate of stamp duty has been provided by any of the states in respect of stamp duty payable on issue of share certificates by Section 8 Micro Finance Company.
As in the case of other companies, no stamp duty is payable on the transfer of shares, the same is applicable for Section 8 Micro Finance Company also.
No, a foreign company cannot be registered as a Section 8 Micro Finance Company in India.
No. a one-person company cannot be incorporated as a Section 8 Micro Finance company or cannot convert into a Section 8 Micro Finance Company.
No, a one-person company cannot become a member of Section 8 Micro Finance Company as a one-person company is not allowed to invest in any securities of any body corporates.
Yes, a Partnership firm or an LLP can become a member of Section 8 Micro Finance Company in its individual capacity.
Yes, a registered Trust can become a member of Section 8 Micro Finance Company.
Yes, a Co-operative society can become a subscriber/ member of a Section 8 Micro Finance Company.
Yes, Microfinance registration in India can receive contributions from overseas or non-residents provided it has to comply with the Foreign Contribution and Regulation Act, 2010 and take prior approval of RBI before it can receive any donations from outside India.
No, Section 8 Micro Finance Companies enjoy limited liability status even without adding the words “Limited” or “Private Limited”.
Yes, Section 8 Micro Finance Company is eligible for the benefits which are provided under the various laws in India such as exemption from GST registration under the GST law, registration under section 12A and 12 AA under the Income Tax Act,1961.
No, Section 8 Micro Finance Company has to separately apply for registration under the various Sections of The Income Tax Act, 1961 to avail the benefits available for organisations engaged in charitable activities under the Income Tax Act, 1961.
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