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Micro Finance Company - An Overview
As evident from the name “Micro Finance”, Micro Finance Company is a form of an entity which provides small Finance services to the businesses and Individuals denied for Loan from the Banks and Financial Institutions. Microfinance offer loans and credit line to the businesses and households from an amount as low as less than 50,000 INR to maximum 1,25,000 INR for dwelling houses . This concept is popular in Urban areas basically as the limit of maximum loan offering is 1,25,000 . They Provide loan at an inexpensive rates as directed by RBI without creating any charge on property.
Two Kind of Microfinance is incorporated in India as of now
- As approved by RBI.
- Section 8 without the approval of RBI.
Micro Finance Company Package Includes
Name Approval of
Proposed Company
Bank Account
opening Kit
DIN and DSC of 2
Proposed Directors.
Relationship
Manager (RM)
Certificate of
Incorporation
( COI)
EPFO
Registration
MOA, AOA, E-PAN & E-TAN
ESIC
Registration
License to act
as an NGO
( Section 8)
Government Challan
& Fees
Register Micro Finance Company
Requirements for Registration
- At least 2 shareholders and Directors who can be the same person.
- One of the Directors must be resident in India.
- Director Identification number (DIN) of all the Directors and shareholders are required.
- Digital Signature certificate (DSCs) of all the Directors and shareholders are required.
Note: Company planning to incorporate in any specific Government regulated sectors are required to take Prior Approval of the Department before Registering the Company.
Process of Registering Micro Finance Company
Filing for Name Approval
After the submission of documents to the Legalite, we apply 2 names to Ministry of Corporate Affairs vide www.mca.gov.in on behalf of our clients along with the requisite fees. Name Approval Generally takes 24-48 Hours Excluding Holidays.
Application of DIN and DSC
The application of Director Identification number and Digital Signature is made as soon as the name is approved by MCA. The above application and completion generally takes 24-48 hours.
Framing of MOA and AOA and Submission
The MOA and AOA is drafted through the expert (CA/CS) as per the requirement of the Client, since the MOA contains the Object of the Company / Purpose for which the company is registered, Client’s involvement is required for accomplishment of the same. After the Drafting the application is finally made to the Department along with the attached DSCs of Subscribers/Directors and Professional (CA/CS/CMA)
Issuance of COI, E-Pan, E-Tan, ESIC and EPFO Registration
If the Department is satisfied with the Documents submitted and is of view that the Information given are in order and Documents are in order, it issues the Certificate of Incorporation Followed by E-Pan, E-Tan, ESIC and EPFO Registration.
Documents Required
For Directors / Shareholders
- Passport Size Coloured photograph.
- Aadhaar Card and Pan Card (Self Attested).
- Email Id and Mobile number.
- Telephone / Gas Bill/Electricity bill/ Bank Statement (Not exceeding 60 Days).
- Passport/ Voter ID, Driving License.
For Registered office Proof.
- Proof of Premise: Electricity Bill/Telephone Bill/water Bill.
- No objection Certificate (NOC) From Owner of Premise.
General Queries
Two names in order of Priority can be applied at once on www.mca.gov.in website. Although all the rules pertaining to Rule 8 – Companies (Incorporation) Rules, 2014. The Uniqueness of name is also an important factor to be kept in mind while applying name of company. The Name Approval normally takes 24-48 hours from the time of application excluding holidays.
Before deciding the name the factors such as uniqueness and Rule 8 – Companies (Incorporation) Rules, 2014 must be borne in mind, in order to check the name on www.mca.gov.in following steps are to be followed:
1. Visit on www.mca.gov.in
2. Click on MCA Services
3. Click on Company Services and Check Company Name
There is no such specific restriction as far as the Companies Act, 2013 is concerned rest Terms and Conditions or Job offer letter may be referred for any such restriction from your Employer. Many Companies Put restrictions pertaining to carrying on company while working in the company.
Yes, your Brother, Father, Mother or any relative may act as the second Director/ Shareholder.
No, Applicability of all above is entirely based on the threshold limit set by the Government in that regard. Relevant act may be referred for specific provisioning.
Yes, the address of Company may be changed after the registration following the secretarial compliance post registration.
Yes, you are supposed to deposit the sum equivalent to the shares subscribed during incorporation in the company’s Bank account opened after the Registration.
Yes, the appointment of auditor who is Practising chartered Accountant in Practice is required to be done within 30 Days from the date of Incorporation and form ADT-1 is required to be filed within 15 days from the expiry of 30 days.
- The cost of borrowing funds plus 12% margin (Say, if the MFIs borrowed funds at 13%, it can loan the funds at 25% or less than that.)
- Average base rate of 5 largest public sector banks * 2.75 (Say, the average base rate of such banks is 9%, then the MFI can lend its funds at 24.75% (9*2.75))
The lower of (1) and (2)