Starts Non-Banking Financial Company (NBFC) from ₹ 10999/
Non-Banking Financial Company (NBFC)
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, and chit business but does not include any institution whose main business is that of agriculture activity, industrial activity, purchase or sale
A non-banking financial company is also one that receives deposits under any scheme or arrangement on a single occasion, in installments through contributions, or in any other way as its primary activity (Residuary non-banking company).
Advantages to registered Limited Liability Partnership (LLP)
1. Certificate of Company Incorporation.
2. Detailed information about the management along with a brochure of the company.
3. A copy of PAN/Corporate Identity Number (CIN) of the company.
4. Documents related to the office location/address
5. Certified copy of the Memorandum of Association (MoA) and Articles of Association (AoA).
6. List of Directors’ profile duly signed by each director must be attached.
7. CIBIL/credit reports of the Directors of the Company are required.
8. A copy of the board resolution which certifies that the company has not carried out or stopped NBFC activity and will not carry any until the registration from RBI is granted.
9. A board resolution on ‘Fair Practices Code’ is to be passed and a certified copy of the same is to be submitted.
10. Certificate issued by the statutory auditor stating that the company is not holding the public deposit and does not accept it as well.
11. Certificate specifying owned funds as on the date of the application from the Statutory Auditor is required.
12. Information regarding the bank account, balances, loans, credits, etc. is to be furnished.
13. If applicable, audited balance sheet and profit and loss statement along with the directors and auditors report of the preceding three years has to be submitted.
14. Self-certified copy of the bank statement and Income Tax Returns is required.
15. Information detailing the company’s future plan, generally for the next 3 years, along with the projection of balance sheets, cash flow statement and income statement
Step 1: Register the company under the Companies Act 2013 or under Companies Act 1956.
Step 2: Minimum Net Owned Funds of the Company should be Rs. 2 crore or more.
Step 3: There should be atleast 1 director in the company from the same background.
Step 4: Good CIBIL score is required to present in order to register as NBFC.
Step 5: Next, visit RBI’s official website and fill in the application form.
Step 6: Submit all the required documents along with the application form.
Step 7: Once you have submitted the application form, a CARN number will be generated.
Step 8: Send the hard copy of the application to the regional branch of RBI.
Step 9: After the application is checked and verified, the License will be given to the company..
Only NBFCs with a special banking permit and an investment-grade are permitted to accept and hold deposits totaling up to 1.5 times their net owned funds. However, demand deposits, such as those from savings and current accounts, are prohibited for all NBFCs.
The RBI has established some regulations that must be followed. Some of the most significant statutory compliances include filing income tax returns, ROC returns, statutory audits, tax audits, and different NBS returns for enterprises that take and do not accept deposits.
A 50/50 test means that a firm’s financial assets constitute more than 50% of the total assets and income from financial assets constitute more than 50% of the gross income. A firm which fulfills both these criteria will be registered with the RBI as an NBFC. If, after registration, a firm violates the 50/50 criteria then RBI has the authority to penalize the NBFC.
The top NBFCs in India are Bajaj Finserv, Aditya Birla, Tata Capital, Muthoot Finance, HDB Finance, Capital First, Lendingkart Finance, IIFL, etc.