Section 8 Company (Microfinance Company)

Registration of microfinance companies under section 8 is the most suitable option when you want to start a finance business across India without RBI approval and capital restriction.

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OVERVIEW

Register a Section 8 MFC

Registration of microfinance companies under section 8 is the most suitable option when you want to start a finance business across India without RBI approval and capital restriction.
Section 8 microfinance companies can be started with microfinance objects for social objects to help poor people to reduce poverty. Such companies are exempted to get a license from RBI under its master circular RBI/2015-16/15 DNBR (PD) CC.No.052/03.10.119/2015-16 Dated July 01, 2015.
Section 8 microfinance company can offer for unsecured loan i.e., personal loan, group loan, loan for household, etc. at the interest rates as specified by the RBI norms (currently it is 26% p.a.) The main object of the section 8 microfinance company is to reduce the poverty in the country, therefore it facilitates the loans hassle-free without more paper works and procedures.
The loan limit is Rs. 60,000 in the first cycle and Rs.1,25,000 in subsequent cycles. The total ineptness of the loan shall not be expressed from 1 lac at a time

Registration of section 8 micro finance company with VAKILKARO

Registration of section 8 microfinance companies can be easily done with VAKILKARO with legal expertise. It is totally online process, which started with two (2) Natural persons. The Ministry of Corporate Affairs (MCA) has given the power to the Registrar of Companies (ROC) to issue the License of section 8 microfinance Companies, which takes 7 days estimated. VAKILKARO has the legal expertise in Registration, Legal Compliance, Loan Agreement Drafting, and Loan Recoveries of microfinance companies as well Finance Companies like NBFCs.

BENEFITS

Advantages of Section 8 Micro Finance Company

Section 8 microfinance company is exempted to get the license from RBI vide notifications no.

Section 8 microfinance companies have the special advantage to provide unsecured loans across India. i.e., personal loan, group loan, etc.

Like Nidhi company, section 8 microfinance company have no jurisdictional or working area restrictions. In simple, section 8 microfinance companies can be operated across India.

Company registered u/s 8 of the companies act, 2013 have its objects of social and welfare purposes, with microfinancing, therefore, section 8 company also known as a non-profit company.

Section 8 microfinance company may offer an attractive rate of interest on a loan provided, which can be up to 26 % p.a. on reducing value.

REQUIRED DOCUMENTS

Documents required to register Section 8 Micro Finance Company

PAN Card

PAN CARD of 2 persons is mandatorily required and in case of the foreign national valid passport also requires.

Proof of Identity

Any proof of identity like the Aadhaar Card/ voter id card/driving license of all 2 persons is mandatorily required.

Company Name

The client has to be provided at least two Company names to apply for name approval.

Photo/Mobile Numbers/ Email IDs/ Bank Statements

All the 2 persons must have their photos, mobile numbers, valid emails, and latest bank statements (must not be older than 2 months).

Office Address Proof

The client has to provide Office Address proof like Rent Agreement/Property papers with the latest electricity bill.

Process

The process to Register a Section 8 Micro Finance Company in India

Name Approval 1-2 Days

  • The client has to provide at least two names out of which one name will be approved by MCA

Digital Signature:(1-2 days)

  • The second process is to apply and approve the digital signature of all 2 members in Section 8 microfinance company.

Application filling and approval for certification: (15-30 days)

  • Our experts will file the complete document with drafted copies of the MOA and AOA of the company. If there is no objection the certificate of incorporation will be issued by the MCA.

Congratulation!

  • work is done
COMPARE RELATED SERVICES

Compare different business structures to choose the right entity type

  • Member
  • Minimum Capital Required
  • RBI License
  • Compliance
  • Profit earning
  • Incorporation cost
  • Suitable for
  • Nature of the company
  • Working area
  • Saving account opening facility
  • Nidhi Company
  • 7
  • 5 Lacs
  • No Need
  • Moderate
  • Yes
  • Nominal
  • Secured loan and deposits
  • Limited
  • District level
  • Yes
  • get started
  • Section 8
  • 2
  • No need for minimum capital
  • No Need
  • Moderate
  • No
  • Nominal
  • Unsecured loan
  • can be Ltd or Pvt Ltd
  • PAN India
  • No
  • get started
  • Micro Finance
  • 2
  • 2 Cr.
  • Required
  • High
  • Yes
  • High
  • A secured and unsecured loan
  • can be Ltd or Pvt Ltd
  • PAN India
  • No
  • get started
FREQUENTLY ASKED QUESTIONS

Explore Section 8 Company (Microfinance Company)

1. What are the types of section 8 company?

There are two types of companies as per its nature i.e. private limited and limited. A section 8 company can be registered as private limited company or public limited.

7. What are the Capital Requirements to Start Section Microfinance Company?

There is no bar by law for minimum and maximum capital, you can start with Rs. 10,000 as well.

3. Is it necessary that section 8 companies has to be incorporated as limited company with share capital?

A section 8 company can be registered as company with limited by shares or by guarantee (with and without share capital).

4. Can a Private Limited Company convert into section 8 company?

Yes, according to provisions of the Companies Act, 2013 allows persons or associations of the person to be register as a section 8 company to fulfillment of particular conditions for it.

5. Is it mandatory to have charitable motive for section 8 company registration?

Yes, it is necessary to have non -profit object of the section 8 company.

6. Is it valid & legal to provide loans under section 8 companies having micro finance object?

Yes, the companies registered under section 8 having micro finance object, can do finance activities for social purpose to reduce poverty. The RBI has exempted such companies vide its master circular to getting the license from RBI.

7. Is GST Required to start Section 8 Microfinance Company?

No, you can start without taking of GST Certificate.