Introduction:-
The Section 8 Microfinance Company, a specialized financial institution, plays a pivotal role in uplifting the economically weaker sections of society. Incorporating a Section 8 Microfinance Company involves several crucial steps that are designed to ensure transparency, accountability, and compliance with regulatory norms. In this article, we will guide you through the process of Section 8 Microfinance Company Registration.
Understanding Section 8 Microfinance Company:-
A Section 8 Microfinance Company is a not-for-profit organization established with the objective of promoting financial inclusion among the underserved and economically disadvantaged sections of society. These entities operate with a primary focus on providing microfinance services, including small loans, savings facilities, and other financial products, to individuals and small businesses in need.
Step-by-Step Process of Section 8 Microfinance Company Registration:-
1.Pre-Incorporation Formalities:
- Director Identification Number (DIN) and Digital Signature Certificate (DSC): The first step is obtaining DIN for the proposed directors and DSC for the authorized signatories. These are essential for digitally signing documents during the registration process.
- Name Approval: Choose a unique name for your Section 8 Microfinance Company and apply for its approval with the Registrar of Companies (RoC).
2. Drafting the Memorandum and Articles of Association:
- The Memorandum of Association (MoA) and Articles of Association (AoA) outline the company's objectives, rules, and regulations. In the case of a Section 8 Microfinance Company, it should specify its not-for-profit status and the promotion of microfinance services.
3. Application for Section 8 License:
- File an application with the RoC for obtaining a license under Section 8 of the Companies Act, 2013. This license is essential for companies with charitable objectives.
4. Incorporation Documents Submission:
- Compile and submit the necessary documents, including the MoA, AoA, Form INC-12 (Declaration for Obtaining License), and other required forms, along with the requisite fee to the RoC.
5. Verification and Approval:
- The RoC will review the documents and, if everything is in order, grant the Section 8 License. This may take a few weeks, depending on the workload of the RoC office.
6. Obtain Certificate of Incorporation:
- Upon successful verification, the RoC will issue a Certificate of Incorporation, officially recognizing your Section 8 Microfinance Company.
7. PAN and TAN Application:
- Apply for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) with the Income Tax Department.
8. Bank Account Opening:
- Open a bank account in the name of the company and obtain the necessary account details.
9. Registration with RBI (Optional):
- Depending on the nature of activities and the scale of operations, you might need to register with the Reserve Bank of India (RBI) as a Non-Banking Financial Company (NBFC).
Conclusion:-
Establishing a Section 8 Microfinance Company involves a meticulous process, starting from obtaining the necessary approvals and licenses to finally commencing operations. It is essential to engage with legal and financial advisors who are well-versed in the regulatory framework to ensure compliance at every step of the way. By following this structured approach, you can contribute to the financial empowerment of the marginalized sections of society through your Section 8 Microfinance Company Registration.