Easily register a NBFC company in INDIA

What are the requirements for NBFC company registration?

• Unique name: To register an NBFC company, you must have a unique name for the proposed company, you can check company name availability through our online company name search tools.
• Directors: Company must have at least 2 natural people appointed as directors, age must be above 18 years.
• Shareholders: There must be at least 2 shareholders; they can be a natural person or can be an entity. It is common in new company registration for directors to also be the shareholders. Percentage of A shareholding must be defined.
• Capital requirement: A minimum paid -up capital of Rs.2 crore is required to incorporate an NBFC.
• Net owned: It should have a minimum net owned fund of Rs. 2 crore.
• Finance activity as principal business: Any incorporated company which has financial activity as principal business, i.e. when a company’s financial assets comprise more than 50 per cent of the total Assets and income from financial assets comprise more than 50 per cent of the gross income. A company which fulfils both these criteria is eligible to register as an NBFC with the RBI.
• Authorized capital: You must decide the authorized capital while incorporating a NBFC company, the authorized capital of a company is the maximum amount of share capital for which shares can beissued by a company. The initial authorized capital of the NBFC Company is Rs. 2 crore.
• Registered office: when you start a NBFC company in India, the law requires that your business must have an office address. This address will be publicly available on the registrar of companies.(ROC) website for anyone to see.
  Registered office addresses must be displayed on all company stationery, emails, and websites.
• Clean CBL Records: Shareholders and directors should have a clean credit history. They shouldn’t have wilfully defaulted on the repayment of loans.
• Documents: NBFC company registration process is an online process, so you can just scan or photograph documents. the attested documents of directors, shareholders and registered office from your mobile phone and Send them to us, and the rest will be taken care of.

What are the types of NBFC?

NBFCs can be categorized in the following ways:

• Deposit accepting NBFCs
• Non deposit taking NBFC
• Based on the kind of activity they conduct,

Following are the different types of NBFCs based on kind of financial activity:

• Investment Company: It means any company is a financial institution having its principal business as the acquisition of securities.
• Asset Finance Company: It is a type of finance company which has its principal business of financing physical assets, supporting productive economic activity, such as automobiles, tractors, agriculture equipment, industrial machines, generator sets, earth moving and material handling equipment, etc. The principal business is to finance tangible assets that support economic activity and income arising therefrom should not be less than 60% of its total assets and total income, respectively.
• Loan Company: Loan company is a type of finance company with its principal business as providing finance whether by granting loans or advances or otherwise for any activity other than its own, but it does not include an asset finance company.
• Infrastructure Finance Company: It’s a type of NBFC company which deploys at least 75 % of its total assets in infrastructure loans, it should have a minimum net owned funds of Rs.300 crore, and should have a minimum credit rating of ‘A ‘or equivalent and a CRAR of 15%.
• Systematically Important Core Investment Company: This type of NBFC company engaged in the business of acquisition of shares and securities, it must satisfy the following conditions:
• It must hold more than 90% of its total assets in the form of investments in equity shares, preference shares, debt or loans in group companies.
• Investments in equity shares (including instruments mandatorily convertible into equity shares within a 10-year period from the issue date) in group companies must be more than 60% of its total assets.
• It should not trade in its shares, investments, debt or loans in group companies except through block sale for the purpose of dilution or disinvestment.
• It should not carry on any other financial activity stipulated in sections 45(I) and 45I(f) of the 1934 except investment in government securities , money market instruments, bank deposits, investments in debt issuances and loans to group companies or guarantees issued on behalf of group companies.
• Its asset size should be Rs. 100 crore or above.
• It accepts public funds.
• Infrastructure Debt Fund: It’s a type of company registered as an NBFC to facilitate the flow of long term debt into infrastructure projects. It raises resources through the issue of rupee or dollar denominated bonds of a minimum of 5 years’ maturity. Only infrastructure finance companies (IFC) can sponsor Infrastructure Debt Fund.
• Micro Finance Company: It is a non-deposit taking NBFC which holds more than 85% of its assets in the nature of qualifying assets which satisfy the following criteria:
• A loan disbursed by a microfinance company to a borrower with a rural household annual income not exceeding Rs. 1,00,000 or an urban or semi-urban household income not exceeding Rs. 1,60,000.
• The loan amount should not exceed Rs. 50,000 in the first cycle and Rs. 1,00,000 in subsequent cycles.
• The total debt of the borrower does not exceed Rs. 1,00,000.
• Loan tenure should not be less than 24 months for loan amounts in excess of Rs.15,000 with prepayment without penalty.
• Loan to be extended without collateral.
• The aggregate amount of loans, given for income generation, should not be less than 50% of the total loans disbursed.
• The loan is repayable at the choice of the borrower, with no restriction on the frequency of repayment, it could be on weekly, fortnightly, or monthly installments.
• Mortgage Guarantee Companies: It is a type of financial institution which has at least 90% of the business turnover as a mortgage guarantee business or at least 90% of the gross income is from mortgage guarantee business and net owned fund is Rs. 100 crore.
• Factors (NBFC-Factors): NBFC-Factor is a non-deposit taking NBFC. They are involved in the principal business of factoring. These companies usually buy loans at a deep discounted rate from lenders and after that, they adjust the repayment plan matrix of the debtor to ensure smooth settlement, adding small profit. The financial assets in the factoring business should constitute at least 50 percent of its total assets and its generated income from the factoring business should not be less than 50 percent of its gross income.
• Non-Operative Financial Holding Company: is a type of entity through which a promoter or promoter groups will be permitted to open a new bank .It’s a wholly-owned non-operative financial holding company, which will hold the bank and other financial services companies regulated by RBI or other financial sector regulators like SEBI.

Documents required for NBFC company registration:

Director’s documents:

• Passport size photograph
• Copy of PAN Card
• Copy of passport/ driving license/voter identity card
• Proof of residence (electricity bill/telephone bill, /mobile bill, bank statement )

Documents required for the registered office:

• Latest electricity bill/ mobile bill/ telephone bill (business place)
• Copy of rent agreement (if rented property)
• Copy of property papers (if you own property).
• Landlord NOC (format will be provided)

If shareholders and directors are different, then the following documents from shareholders are required:

• Copy of PAN Card
• Copy of passport/ driving license/ voter identity card
• Proof of residence of shareholders (electricity bill/telephone bill /mobile bill / bank statement )

In case shareholder is corporate body:

• Registration certificate
• Copy of PAN card

All documents should be self attested and to be provided as soft copy.