{"id":3058,"date":"2021-03-06T09:01:56","date_gmt":"2021-03-06T09:01:56","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=3058"},"modified":"2021-03-06T09:05:47","modified_gmt":"2021-03-06T09:05:47","slug":"procedure-for-micro-finance-company-registration","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/procedure-for-micro-finance-company-registration\/","title":{"rendered":"Step by Step Procedure for Micro Finance Company Registration"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Micro Finance\nCompany is a company that provides financial services like credit, loans,\nsavings and insurance to small business entrepreneurs and small enterprises. It\nprovides small financial support to the low income groups in the rural and\nsemi- urban areas, that is, it is eligible to provide loans up to Rs. 50000 in\nrural areas and Rs 125000 in urban areas to the small enterprises,\nentrepreneurs, and low income group. It provides credits to agriculturists,\nsmall businessman, farmers, horticulturists and etc. <strong><a href=\"https:\/\/swaritadvisors.com\/microfinance-company-registration\" class=\"text-primary\">Micro\nFinance Company registration<\/a><\/strong> is important and can be done either as\nNBFC or as Section 8 Company. This article will talk about the step by step\nprocedure for micro finance company registration in India.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a54b87f469c5\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a54b87f469c5\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-micro-finance-company-registration\/#What_is_a_Micro_Finance_Company\" title=\"What is a Micro\nFinance Company?\">What is a Micro\nFinance Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-micro-finance-company-registration\/#Role_and_Objectives_of_Micro_Finance_Company\" title=\"Role and Objectives of Micro Finance Company\">Role and Objectives of Micro Finance Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-micro-finance-company-registration\/#Procedure_for_Micro_Finance_Company_Registration_as_an_NBFC\" title=\"Procedure for Micro\nFinance Company Registration as an NBFC\">Procedure for Micro\nFinance Company Registration as an NBFC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-micro-finance-company-registration\/#What_are_the_Documents_required_for_the_micro_finance_company_registration_as_an_NBFC\" title=\"What are the\nDocuments required for the micro finance company registration as an NBFC?\">What are the\nDocuments required for the micro finance company registration as an NBFC?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-micro-finance-company-registration\/#Procedure_for_Micro_Finance_Company_Registration_as_Section_8_Company\" title=\"Procedure for\nMicro Finance Company Registration as Section 8 Company\">Procedure for\nMicro Finance Company Registration as Section 8 Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-micro-finance-company-registration\/#What_are_the_Documents_required_for_the_micro_finance_company_registration_as_Section_8_Company\" title=\"What are the\nDocuments required for the micro finance company registration as Section 8\nCompany?\">What are the\nDocuments required for the micro finance company registration as Section 8\nCompany?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-micro-finance-company-registration\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_Micro_Finance_Company\"><\/span>What is a Micro\nFinance Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As stated about\nin the introduction, Micro Finance Company is a financial institution that\nprovides finances to the low income groups. Such group of people generally do\nnot have access to traditional financial institutions such as banks and other\nfinancial institutions. The micro finance companies provide loans and advances\nwithout demanding any collateral security or marginal money. It acts as a\ngreater support to the agricultural and rural development and generation of\nincome and employment. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Role_and_Objectives_of_Micro_Finance_Company\"><\/span>Role and Objectives of Micro Finance Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The role of\nmicro finance is related to lending funds to those who do not have access to\ncapital. It allows the individuals to become financially stable and work towards\nbuilding a standard life. The artisans, small businesses, transport and\nprofessional trades and agriculture and allied activities can avail financial\nassistance from micro finance companies to improve and increase its production.\nThe objectives of micro finance companies are as follows:<\/p>\n\n\n\n<ul><li>To offer banking services but as small monetary amounts. <\/li><li>To help the people belonging from low- income group to become self- sufficient. <\/li><li>Help increase the participation of women in generating sustainable livelihood. <\/li><li>To give financial assistance to the individuals who does activities such as fishing, transportation, carpentry and etc. <\/li><li>Provide financial assistance to small enterprises who cannot afford collaterals and securities. <\/li><li>Provide an opportunity to have access to quality healthcare. <\/li><li>Creating opportunity for self- employment.<\/li><\/ul>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/start-microfinance-company-in-india\/\">Start Microfinance Company in India: A Complete Business Plan<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_for_Micro_Finance_Company_Registration_as_an_NBFC\"><\/span>Procedure for Micro\nFinance Company Registration as an NBFC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following\nsteps are involved in the micro finance company registration as an NBFC:<\/p>\n\n\n\n<ul><li>The first step in the micro finance company\nregistration as an NBFC is to form a private company or a <strong><a href=\"https:\/\/swaritadvisors.com\/public-limited-company-registration\" class=\"text-primary\">public\nlimited company<\/a><\/strong>. At least 2 members or shareholders and a minimum of 7\nmembers are required to form a public company. <\/li><li>Further, a minimum net owned fund of Rs. 5 crore\nis required to be raised. For the north-eastern region the minimum requirement\nis of Rs. 2 crore. <\/li><li>Once the capital is collected, it is required to\ndeposit the capital in the bank as a fixed deposit (FD) and obtain a \u201cNo lien\u201d certificate for the\nsame. <\/li><li>Lastly, the <strong><a href=\"https:\/\/swaritadvisors.com\/nbfc-registration\" class=\"text-primary\">NBFC<\/a><\/strong> is required to\nfill an online application for license and submit such application along with\nall the required documents. A hard copy of the license and the application\nshould also be submitted at the regional office of the Reserve Bank of India. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Documents_required_for_the_micro_finance_company_registration_as_an_NBFC\"><\/span>What are the\nDocuments required for the micro finance company registration as an NBFC?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\ndocuments are required in order to register micro finance company as an NBFC: &#8211;\n<\/p>\n\n\n\n<ul><li>Copy of Board Resolution<\/li><li>Memorandum of Association and Articles of\nAssociation. <\/li><li>Company\u2019s Incorporation Certificate. <\/li><li>A copy of Auditor\u2019s report and fixed deposit\nreceipt. <\/li><li>The banker\u2019s report about the company. <\/li><li>The banker\u2019s certificate of the \u2018No lien\u2019\nstating the net owned worth. <\/li><li>The latest directors credit report. <\/li><li>Directors net worth certificate. <\/li><li>Qualification proof of the director. <\/li><li>Income proof and KYC of the director. <\/li><li>Work experience proof in the financial sector. <\/li><li>The organization\u2019s structure plan. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_for_Micro_Finance_Company_Registration_as_Section_8_Company\"><\/span>Procedure for\nMicro Finance Company Registration as Section 8 Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following  is procedure for micro finance company registration  as Section 8 Company:<\/p>\n\n\n\n<ul><li>In order to register a micro finance company as\nsection 8 company, the first step is to apply for DSC and DIN. It is important\nto apply for DSC to authorize the e- forms. <\/li><li>Further, application for name approval must be\nmade in Form INC- 1. It is necessary that the name must represent that it is\nregistered as a Section 8 Company. Therefore, words like foundation, sanstha\nand etc. must be used. <\/li><li>Once the name approval is done, the company is\nrequired to draft the Memorandum of Association (MOA) and Articles of\nAssociation (AOA) and file it along with all the required documents. <\/li><li>The final step is to file the Form INC- 12 along\nwith the certificate of incorporate and all the relevant documents. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Documents_required_for_the_micro_finance_company_registration_as_Section_8_Company\"><\/span>What are the\nDocuments required for the micro finance company registration as Section 8\nCompany?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following documents are required in order to micro finance company registartion as Section 8 Company:<\/p>\n\n\n\n<ul><li>Documents related to identity proof.<\/li><li>Documents related to address proof. <\/li><li>Copy of PAN (Permanent Account Number) Card of\nall the directors and promoters. <\/li><li>Photograph of all the directors and promoters. <\/li><li>Proof of rental agreement or ownership of\nregistered office. <\/li><li>No objection certificate (NOC) from the owner.<\/li><li>As mandated by the State, an applicable stamp\nduty. <\/li><li>Any other relevant documents as required. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The <a href=\"https:\/\/www.rbi.org.in\/\">RBI<\/a> regulates and controls the activities of the Micro Finance Company. The micro finance company has been witnessing a very high growth and the purpose of it is to provide the financial assistance to the low income groups so that they can have a sustainable and stand lifestyle. The step by step procedure for micro finance company registration has been discussed in detail in the above article. And it is necessary to register the micro finance company so that it can achieve its objective for which it has been established.<\/p>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/differences-between-microfinance-companies-and-nbfcs\/\">Differences between Microfinance Companies and NBFCs<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Micro Finance Company is a company that provides financial services like credit, loans, savings and insurance to small business entrepreneurs and small enterprises. It provides small financial support to the low income groups in the rural and semi- urban areas, that is, it is eligible to provide loans up to Rs. 50000 in rural areas [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":3059,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[59,56],"tags":[467],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3058"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=3058"}],"version-history":[{"count":4,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3058\/revisions"}],"predecessor-version":[{"id":3063,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3058\/revisions\/3063"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/3059"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=3058"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=3058"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=3058"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}