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NBFC Registration

NBFC Registration is the official authorization process for a Non-Banking Financial Company to engage in financial activities. It involves compliance with regulatory standards, maintenance of minimum Net Owned Funds, and obtaining a certificate of registration. NBFCs, while restricted from traditional banking, play a crucial role in financial services under regulatory supervision.

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Steps for NBFC Registration

  • Incorporate the Company - Begin by incorporating a company under the relevant corporate law.
  • Ensure Minimum Capital - Verify compliance with minimum capital requirements set by the regulatory authority.
  • Draft MoA and AoA - Draft Memorandum of Association (MoA) and Articles of Association (AoA) in line with regulatory guidelines.
  • Submit Application to Regulatory Authority - Apply for NBFC registration, submitting necessary documents and undergoing due diligence.
  • Obtain Approvals - Obtain approvals from the regulatory authority after a background check and assessment.
  • Establish Internal Systems - Set up internal systems and processes in compliance with regulatory standards.
  • Final Approval and Ongoing Compliance - Receive the final approval and certificate of registration, ensuring ongoing compliance with regulatory requirements.

Documents Required

  • Certificate of Incorporation under relevant corporate law.
  • Memorandum and Articles of Association (MoA and AoA) of the company.
  • Proof of minimum capital infusion and banker's report.
  • Background details, financial statements, and credit reports of promoters.
  • Management team information, qualifications, and experience.
  • Comprehensive business plan and due diligence report.
  • Audited financial statements (if applicable) for the past three years.
  • Net Owned Fund certificate from a chartered accountant.
  • Details of infrastructure, including office premises and technology systems.
  • Board resolution expressing intent to carry on NBFC activities.
  • Declaration of fit and proper status for directors and key personnel.
  • Affidavits and undertakings from relevant stakeholders.
  • Certificate of Registration from the Registrar of Companies (RoC).
  • Compliance certificate from a Company Secretary or practicing chartered accountant.

Our Process to Work

Taxperts Associates offers an efficient NBFC Registration process, harmonizing legal requirements and regulatory approvals.

  • Initial Consultation - Conduct an assessment of the client's business plan and financial structure to determine eligibility for NBFC registration.
  • Documentation Guidance - Assist in preparing necessary documents, including the Memorandum and Articles of Association, business plan, and financial statements.
  • Application Submission - Prepare and submit the NBFC registration application to regulatory authorities, acting as an intermediary between the client and authorities.
  • Due Diligence and Compliance - Conduct due diligence on the client's background, facilitate compliance with regulatory requirements, and guide on legal structures.
  • Approval Facilitation - Liaise with regulatory authorities, monitor application progress, and facilitate the process of obtaining necessary approvals and certificates.
  • Post-Registration Support - Offer guidance on post-registration compliance, operational setup, and ongoing regulatory requirements to ensure a smooth transition.

Benefits

  • Financial Legitimacy - NBFC Registration establishes financial legitimacy, enhancing credibility in the market.
  • Diversified Financial Services - Allows provision of diverse financial services, including lending and investment activities.
  • Investor Confidence - Builds investor confidence with regulatory oversight, ensuring compliance with financial and ethical standards.
  • Enhanced Borrowing Capacity - Facilitates an increased borrowing capacity, enabling access to funds from banks and financial markets.
  • Structured Operations - Necessitates structured operations, fostering disciplined and well-managed financial practices.
  • Promotion of Financial Inclusion - Plays a role in promoting financial inclusion by reaching underserved populations.
  • Legal Recognition and Governance - Provides legal recognition and aligns with corporate governance standards, ensuring transparency and accountability.

Frequently Asked Questions

An NBFC is a financial institution that provides banking services like loans, investments, and similar activities but does not hold a banking license.

Registration is necessary for legal recognition, regulatory compliance, and authorization to operate as an NBFC, ensuring adherence to financial regulations.

Key requirements include minimum capital infusion, compliance with regulatory guidelines, due diligence, and a comprehensive business plan.

The timeline varies but generally takes several weeks to months, depending on regulatory procedures, due diligence, and the jurisdiction.

No, operating without registration is illegal, and registration is mandatory to comply with financial regulations and ensure legitimacy.

NBFCs can engage in activities like lending, investment in securities, asset financing, and other non-banking financial services.

The regulatory authority oversees the registration process, sets guidelines, conducts due diligence, and issues approvals for NBFCs to operate.

Yes, NBFCs are required to maintain a minimum level of Net Owned Funds (NOF) as per regulatory norms.

Due diligence assesses the company's financial health, governance, and compliance capabilities, ensuring it meets regulatory standards.

Generally, NBFCs cannot accept demand deposits like traditional banks, but they can offer various other financial services.

Yes, NBFCs must adhere to ongoing compliance requirements, including reporting, audits, and staying abreast of any changes in regulatory guidelines.

Consultancy firms like Taxperts Associates provide support with documentation, compliance, due diligence, and liaison with regulatory authorities during the NBFC Registration process.

At Taxperts Associates, our seasoned tax consultants bring unparalleled expertise to guide you through intricate tax landscapes. With a commitment to precision and personalized service, we empower clients to navigate financial complexities with confidence

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