Introduction:-
Starting a microfinance company under Section 8 of the Companies Act can be a powerful way to empower economically disadvantaged communities. Section 8 companies, also known as non-profit organizations or NGOs, are established with the sole purpose of promoting social welfare activities. This article will guide you through the simplified registration process for a Section 8 Microfinance Company.
Understanding Section 8 Company:-
A Section 8 company is formed for the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object. Microfinance companies under this category focus primarily on providing financial services to the economically weaker sections of society.
Registration Process:-
- Name Approval: Begin by selecting a unique name for your microfinance company. It should reflect the objectives and values of the organization. Once you have a name in mind, apply for its approval through the Ministry of Corporate Affairs (MCA) portal.
- Director Identification Number (DIN): The next step is to obtain DIN for the proposed directors of the company. This can be done by filing Form DIR-3 on the MCA portal.
- Digital Signature Certificate (DSC): Each director must possess a Digital Signature Certificate. This is essential for filing various documents with the Registrar of Companies (ROC).
- Memorandum of Association (MOA) and Articles of Association (AOA): Prepare the MOA and AOA of the company. These documents outline the objectives and rules of the company. Make sure they comply with the requirements specified under Section 8 of the Companies Act.
- Application for License: Prepare the application for obtaining a license under Section 8. This application must be submitted to the ROC along with the MOA, AOA, and other required documents.
- Incorporation Documents: Compile all the necessary documents, including the application for license, MOA, AOA, and the declaration by the proposed directors and submit them to the ROC.
- Scrutiny and Approval: The ROC will examine the documents and if everything is in order, they will issue the license. This license allows the microfinance company to function as a Section 8 entity.
- PAN and TAN Application: Once the license is obtained, apply for the Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the company.
- Registration under Various Acts: Depending on the specific activities of the microfinance company, you may need to register under various other acts such as the RBI Act, 1934 and Microfinance Institutions (Development and Regulation) Act, 2016.
Conclusion:-
Setting up a Section 8 Microfinance Company Registration is a noble endeavor that requires careful planning and adherence to legal procedures. By following the simplified registration process outlined above, you can establish a company that makes a significant positive impact on the lives of the economically disadvantaged. Remember to seek professional advice and consult legal experts to ensure compliance with all regulations.