NBFC
This query is : Resolved
Garima Sachar
(Querist)
28 December 2010
whether a private company is required to be registered as NBFC if it has given loan to another private company?Does this require authorisation in MOA and AOA of lender nd what clause is reqd. if any?
Jayashree S Iyer
(Expert)
29 December 2010
No a private company giving loan to another private company is not necessarily required to be registered as NBFC.
A non-banking financial company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares/ stock/ bonds / debentures / securities issued by government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business, but does not include any institution whose principal business is that of agriculture activity, industrial activity, sale/purchase/construction of immovable property.
So if the private company is primarily engaged in above financing activities then only it's required to be registered.
A non-banking financial company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares/ stock/ bonds / debentures / securities issued by government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business, but does not include any institution whose principal business is that of agriculture activity, industrial activity, sale/purchase/construction of immovable property.
So if the private company is primarily engaged in above financing activities then only it's required to be registered.
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