Registration of finance company

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Ajay S

Ajay S (Querist)

17 June 2013 Dear team,

Can fiance company registration is compulsory? can it be run in proprietor ship?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

17 June 2013 Finance company registration is compulsory with ROC & RBI

Govinda S Meghani

Govinda S Meghani (Expert)

18 June 2013 FAQs on NBFC

https://www.rbi.org.in/scripts/FAQView.aspx?Id=71

Ajay S

Ajay S (Querist)

18 June 2013 it can not be run in proprietor ship???

Govinda S Meghani

Govinda S Meghani (Expert)

18 June 2013 Now all its depends on services you are providing. If you are engaged in any of the following type of business/service then as per SEC 45-IA of RBI Act, registration with RBI is mandatory and it must be a company. Moreover other norms are to followed applicable to NBFC.

(i) the financing, whether by way of making loans or advances or
otherwise, of any activity other than its own:
(ii) the acquisition of shares, stock, bonds, debentures or securities
issued by a Government or local authority or other marketable
securities of a like nature:
(iii) letting or delivering of any goods to a hirer under a hire-purchase
agreement as defined in clause (c) of section 2 of the Hire-Purchase
Act, 1972:
(iv) the carrying on of any class of insurance business;
(v) managing, conducting or supervising, as foreman, agent or in any
other capacity, of chits or kuries as defined in any law which is for the
time being in force in any State, or any business, which is similar
thereto;
(vi) collecting, for any purpose or under any scheme or arrangement
by whatever name called, monies in lumpsum or otherwise, by way of
subscriptions or by sale of units, or other instruments or in any other
manner and awarding prizes or gifts, whether in cash or kind, or
disbursing monies in any other way, to persons from whom monies are collected or to any other person, 1[but does not include any institution,
which carries on as its principal business,–
(a) agricultural operations; or
(aa) industrial activity; or]
(b) the purchase or sale of any goods (other than securities) or the
providing of any services; or
(c) the purchase, construction or sale of immovable property, so
however, that no portion of the income of the institution is derived
from the financing of purchases, constructions or sales of
immovable property by other persons;]
2[Explanation.– For the purposes of this clause, ‘‘industrial
activity’’ means any activity specified in sub-clauses (i) to
(xviii) of clause (c) of section 2 of the Industrial Development
Bank of India Act, 1964;]

clause f:-
‘‘non-banking financial company’’ means–
(i) a financial institution which is a company;
(ii) a non-banking institution which is a company and which has as its
principal business the receiving of deposits, under any scheme or
arrangement or in any other manner, or lending in any manner;
(iii) such other non-banking institution or class of such institutions, as
the Bank may, with the previous approval of the Central Government
and by notification in the Official Gazette, specify;]

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