Section 8 Microfinance Company Registration
Section 8 Microfinance Company Registration - Online
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Section 8 Microfinance Company Registration - Online Process, Documents Required, Cost
Updated on Feb 11, 2024 10:39:28 AM
A Section 8 Microfinance Company, also known as a Microfinance Institution (MFI), is a financial entity dedicated to providing credit to individuals and organizations facing barriers to access traditional financial services due to factors such as poverty, occupation, ethnicity, religion, or nationality.
Registered under Section 8 of the Indian Companies Act, 2013, a Microfinance Company operates under the purview of the Ministry of Corporate Affairs (MCA).
What is a Section 8 Microfinance Company?
Section 8 Microfinance companies serve as financial entities extending credit to low-income groups, particularly aimed at facilitating access to finances for small businesses often overlooked by traditional banking institutions due to intricate procedures.
Termed alternatively as Micro-credit or Micro-benefit organizations, these entities offer a streamlined approach to business registration, allowing for the provision of unsecured loans without requiring approval from the Reserve Bank of India, with interest rates capped at 26% per annum.
In terms of compliance, Section 8 companies operating as Microfinance businesses adhere to standard regulations, with the additional requirement of filing the MBP-1 form.
Process of Section 8 Microfinance Company registration
To form a company, you must apply for the digital signature certificate of the designated directors of the proposed company. All the documents for Section 8 companies are filed online, and e-forms must be digitally signed. So, the designated directors must obtain their DSCs from certifying agencies.
The next step is to apply for name approval. The name must suggest that it is registered as a Section 8 company. While making the name application of the company, the industrial activity code and object clause of the company have to be defined.
After the name approval, details concerning the company’s registration have to be drafted in the SPICe+ form. It is a simplified proforma for incorporating a company electronically. The details in the form are as follows
SPICe e-MoA and e-AoA are the linked forms to be drafted when applying for company registration.
Post-approval of the documents from the Ministry of Corporate Affairs, PAN, TAN & Certificate of Incorporation will be issued from the concerned department.
Section 8 MicroFinance Company Registration Fee
The total cost of registering a micro-credit/finance company under section 8 registration with professional Utiltites is Rs. 50,000 only all-inclusive.
All applicable taxes are included in the approximately that must be paid as part of the registration fee for a section 8 microfinance company.
Documents required for Section 8 Microfinance Company
- PAN & Aadhar Card of both the directors
- Bank Statement with the address of both the directors (not older than 2 months)
- Passport Size Photo
- Email address & Phone number
- Utility Bill of the premises
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On average, it takes around 7-10 working days to register a private limited company in India subject to document verification by MCA.
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