The world of finance is diverse and encompasses various entities that play vital roles in the economy. One such entity is the Non-Banking Financial Company (NBFC), which is involved in a range of financial activities, from lending and investment to insurance and chit funds. To establish an NBFC, one must navigate a complex process that involves regulatory compliance and financial requirements. In this blog, we will delve into the costs associated with registering an NBFC company in India.<\/p>\n
Before discussing the costs involved, it’s essential to understand the different types of NBFCs as per the Companies Act 2013. These include:<\/p>\n
Characteristics:<\/strong> AFCs primarily engage in providing finance for the purchase of physical assets like automobiles, machinery, and equipment. They make loans and advances to individuals and businesses for acquiring these assets.<\/p>\n Registration Process:<\/strong><\/p>\n a. Incorporation:<\/strong> First, incorporate your company as per the Companies Act 2013. Ensure that your company’s Memorandum of Association (MOA) includes the principal business of lending credit for the purchase of physical assets like vehicles, machinery, or equipment.<\/p>\n b. Minimum Capital Requirement:<\/strong> Ensure that your Net Owned Funds (NOF) are not less than Rs. 2 Crores or the authorized share capital of the NBFC is at least Rs. 2 Crores.<\/p>\n c. Application to RBI:<\/strong> Prepare and submit an application to the Reserve Bank of India (RBI) through the RBI’s secured website for online application at https:\/\/cosmos.rbi.org.in. Provide details about your company’s financials, promoters, and business plan. Indicate the correct name of the Regional Office in the application.<\/p>\n d. Physical Application:<\/strong> Submit a physical copy of the application form (indicating the online Company Application Reference Number) along with supporting documents to the concerned RBI Regional Office.<\/p>\n Characteristics:<\/strong> ICs focus on investments in various types of shares, stocks, and securities. They primarily deal with investment activities, including buying and selling financial assets.<\/p>\n Registration Process:<\/strong><\/p>\n a. Incorporation:<\/strong> Incorporate your company under the Companies Act 2013. Ensure that your MOA includes the principal business of dealing in shares, stocks, and securities.<\/p>\n b. Minimum Capital Requirement:<\/strong> Maintain NOF of at least Rs. 2 Crores or the authorized share capital should be Rs. 2 Crores or more.<\/p>\n c. Application to RBI:<\/strong> Prepare and submit an application to the RBI through the RBI’s secured website. Include information about your financials and investment strategies.<\/p>\n Characteristics:<\/strong> LCs provide loans and advances to individuals and businesses. They are primarily involved in lending activities, which may include personal loans, business loans, and other credit facilities.<\/p>\n Registration Process<\/strong><\/p>\n a. Incorporation:<\/strong> Incorporate your company under the Companies Act 2013, specifying in the MOA that your principal business involves lending credit.<\/p>\n b. Minimum Capital Requirement:<\/strong> Ensure that your NOF is at least Rs. 2 Crores or the authorized share capital is Rs. 2 Crores or more.<\/p>\n c. Application to RBI:<\/strong> Submit an application to the RBI via their secured website. Provide details about your lending activities, financials, and promoters.<\/p>\n Characteristics:<\/strong> CIC-ND-SIs are a subset of investment companies and play a significant role in the financial system. They hold substantial investments in other companies, including subsidiaries.<\/p>\n2. Investment Company (IC)<\/strong><\/h3>\n
3. Loan Company (LC)<\/strong><\/h3>\n
4. Systemically Important Core Investment Company (CIC-ND-SI)<\/strong><\/h3>\n