Setting Up A Finance Firm – A Short Guide
Starting a finance company in India is not easy. It requires a rigamarole of legal procedures and registrations. On top of that, both the consumer and the government look at the business with eyes of suspicion because the threat of fraud and scam are genuine. So, how do you go about registering the company? Here is a short guide to it:
- Indian companies that work in the field of finance are termed Non – Banking finance companies (NBFC), most often.
- But business has the choice to register as any one of the following, too:
o Nidhi Companies
o Producer companies
o Local Finance License
o Microfinance via Section 8 route
o Trust and Societies (Credit cooperative) - Out of these, Nidhi Companies are the most popular. To register for it, the following is required:
o Minimum capital of Rs.5 lakh which has to be increased to 10 lakhs in a year.
o A minimum of seven persons is needed out of which 3 have to directors of the firm.
o Necessary documents such as PAN Card, Photo, Identity proof (Aadhar card, Voter ID card) and Address proof (Mobile bill/ Bank statement) of shareholders. Electricity bill, NOC and Rent agreement (in case premises are registered) of the office.
Since choosing the type of finance company you want to register and then completing the paperwork is an arduous process, it is best left in the hands of experts in company registration. We can aid in starting a finance business in India. When you utilise our professionals, you can rest assured that the procedure will not only be simple but also completed in the shortest time possible. The 3 steps we support you on are, Register directors with the MCA, Pick the right company name and Draft the company’s MoA and AoA.
Hi VakilSearch, you are right. Getting the help of an expert is a necessity when it comes to company registration as the amount of legal formalities and paper works can be a muddling task for anyone. I went through your website and was really impressed with your expert company registration services. I will surely recommend your services to my near and dear ones.
Thank you for the informative article. It was brief and to the point which made it an excellent start to understanding how a company can be registered in India. Like most others, we also opted for Nidhi Company and received our GST certificate within a short time period.
As a resident of Kerala, we got our finance company registered under the Local Finance License, one of the options correctly listed in the article. Someone who is based in Maharashtra and wants to start their finance business can opt for the same route and begin operations in the state/district.
Without a single doubt, as partners of an NBFC, we advise every business owner to get the help of experts when it comes to registering a financial firm in the country. The process has become simpler in recent times, yet the legal paperwork can get confusing.
I’d like to give my appreciation for the article without it I wouldn’t have realised that 7 people are required at the minimum to register a Nidhi Company in India. After reading the post, the directors of the company decided to rope in VakilSearch for the job, and we highly recommend them!