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Non-banking financial company (NBFC) is engaged in the business of loans, advances, acquisition of shares/stocks/bonds issued by the Government or local authority or other marketable securities. The NBFCs are considered as financial institutions. In this blog, we discuss what is NBFC, Advantages of NBFC, Registration of NBFC and all other necessary aspects of NBFC.
What is NBFC all about?
NBFC is a company incorporated under the Companies Act, 1956 or the Companies Act.2013 which is engaged in financial activities comparable to that of a bank. NBFCs are financial institutions that provide banking services without meeting the legal definition of a bank. NBFC can raise funds from the public directly or indirectly or can freely lend them to spenders. NBFC advance loans to the various small, wholesale and retail traders as well as self-employed persons. NBFC is very popular due to attractive interest rates on the deposits of investors. The working and operating of NBFCs are regulated by the Reserve Bank of India(RBI) within the framework of the Reserve Bank Of India Act.
Functions of NBFC
NBFC has a great and financial impact on the Indian economy. NBFC focuses on business related to loans and advances, acquisition of shares, stock, bonds etc issued by Government or any local authority. NBFC aims for economic development of our country
Categories of NBFC
NBFCs are mainly categorized into 2 types. One is based on the nature of the activity of the company and other is on deposits.
On the basis of deposits, NBFC companies are two types
i) Companies eligible to accept deposits
ii) Companies not eligible to accept deposits
Types of NBFC companies on the basis of nature of activity are listed below
1) Asset Finance company
2) Investment Company
3) Loan Company
4) Infrastructure Finance company
5) Microfinance company
6) Housing finance company
7) Mortgage Guarantee company
How to Register NBFC?
We will discuss step by step procedure for registration of NBFC
1) Applicant company has to file an online application in the RBI's (Reserve Bank of India) website.
2) After submission of application, the applicant will get a reference number for further inquiry in future.
3) Applicant company needs to submit the duplicate hardcopies and necessary documents to the concerned regional officer of RBI.
4) The regional office will check the accuracy of all submitted documents. After verification of documents and after getting satisfied, the regional office will send the application to the Central office of RBI.
5) The central office will grant the NBFC registration only when it feels that applicant company fulfills all the prescribed things.
Documents required for NBFC registration
List of documents required for NBFC registration is given below:
1) Certificate of company incorporation
2) A bank account with a minimum paid up equity share capital of Rs 2 crore
3)MOA and AOA of the company
4) Well Audited financial accounts of the company
5) Board resolution passed for NBFC registration
6) A brief documentary details about the company's works and activities during the last three years.
7) PAN card.
Corbiz is famous in a matter of providing services relating to NBFC registration. To know more about NBFC registration kindly contact an expert person of Corbiz.
Source url - https://corpbiz-00.webself.net/blog/2019/02/11/how-to-register-a-nbfc
NBFC Takeover is a business strategy of acquiring management of the target company either directly or indirectly or what we called friendly or hostile. The motive of the acquirer is to gain control over the board of directors of the target company.
NBFC Takeover is of two Kinds- Friendly Takeover and Hostile Takeover.
In a friendly takeover, the acquirer first approaches the promoters or the management of the target company for negotiating and acquiring their shares at the decided price. The friendly takeover is mutually agreed between the parties and the target companies have the knowledge about NBFC Takeover .
On the other hand “hostile takeover” has some another face of the coin it is completely against the wishes of the target company’s management. Acquirer directly offers to the shareholders of the target company, without the prior consent of the existing promoters or management.
What does due diligence mean in the matter of NBFC takeover?
Due diligence means inspecting the facts of the documents, verifying the background of documents and also to check the authenticity of matter or organization transaction of the entity to be acquired or purchased.
Following steps of due diligence that should be taken while NBFC Takeover:
1. KYC of all incoming and outgoing Directors, promoters,
2. Incorporation certificate, VAT, GST registration , all other such registrations availed at the time of incorporation or during the ongoing tenure of the company.
3. Inspection of all documents that are to be submitted to the RBI
4. The previous records i.e. last 3 year financial statements, cases pending against the company, debt if any, such other details which could impact the decision.
5. Formal MOU to be signed with a certain token of money. This will confirm the seriousness of both the parties interested in the matter.
What is the Procedure for NBFC Takeover?
RBI is the Governing authority for NBFC takeover . Firstly we are obliged to check what are the prior approval is required for NBFC takeover .
In following cases the prior approval of RBI is required wherein NBFC Takeover takes place :
1. NBFC Takeover either Friendly or Hostile
2. Change in the management leading to a change of 30% of the Directors. However, if such change pertains to change of 30% of the Independent directors or due to the rotation of directors then such changes does not require prior approval of RBI.
3. Change in a Shareholding pattern in such a manner that it leads to transfer of 26% of the Paid-up capital of the company. However, if such change is due to Buyback of the shares or reduction in capital by the approval of a competent court then such changes do not require prior approval of RBI.
What is the Procedure for approval in the case where prior approval is required?
An application on the letterhead of the company requesting the approval is required to be made and certain documents are also to be attached with the application.
Following Documents are required to be attached:
a) Details about the proposed directors or shareholders ;
b) Sources of funds used by the shareholders to acquire the shares in the NBFC Takeover
c) Nonassociation/association declaration by the proposed directors or shareholders of being associated with any unincorporated body that is accepting deposits or with any company,
d) Declaration by the proposed directors or shareholders that there is no criminal case, including for offense under section 138 of the Negotiable Instruments Act, against them
e) Bankers’ Report on the proposed directors or shareholders
f) Financial Statements and Annual Report for the last Three years
Public Notice: Two Public notices are to be published one in the vernacular language of the state where office of NBFC registration is established and one in English in two regional languages. The notices are to be published as follows-
1. For 30days after approval of RBI for such NBFC Takeover
2. Before 30days of entering into an agreement to purchase share/transfer of shares/ transfer of management or such interest for NBFC takeover .
Source url - https://corpbiz.weebly.com/blog/what-is-the-procedure-of-nbfc-takeover-in-india
Before we know about One person company registration process, first of all, we have to know what is One Person Company (OPC). One person company is a new type of business entity that allows a single enterpriser and business person to operate a corporate entity with limited liability protection .
In this blog, we will discuss about One Person Company registration and other aspects of One Person Company registration.
Here we will cover the topics which include:
I) Pre-requisites for One Person Company Registration
II) Benefits of One Person Company Registration
III) One Person Company Registration Process
IV) Documents Required for One Person Company Registration
Let's start the Journey.
I) Pre-requisites for One Person Company Registration
Certain requirements require to be fulfilled before taking One person company registration. List of the requirements need for One Person Company Registration is given below:
1) One shareholder
2) One Nominee
3) One director
4) One person
II) Benefits of One Person Company Registration
By taking One Person Company registration, you are entitled to avail a number of advantages. List of the benefits of One Person Company registration is given below.
1) Endless characteristic - If the Directors or shareholder go away from the company then also OPC continues its existence.
2) Limited Liability Protection - Directors and shareholder of an OPC are not responsible to pay the debts of the company from their personal assets even if the company is declared insolvent.
3) A single person can start a company - An OPC can be incorporated by only one individual person.
4) Separate Entity - An OPC being a legal entity is distinct from its directors and shareholder.
5) Name of the company is protected - After registration of OPC, the name of the company gets protected. Registrar of companies will not accept registration of another company which is similar, identical with an existing name.
6) No necessity of minimum paid-up capital - There is no necessity of any minimum capital to start an OPC.
III) One Person Company Registration Process
Here we will discuss about One Person Company Registration Process and if you wish to take registration then you have to follow this process discussed below:
1) Apply for Digital Signature Certificate - The first step is to get Digital Signature Certificate from the proposed directors with documents like address proof, Aadhaar card, PAN card, Photo etc.
2) Apply for Director Identification Number (DIN) - Next step is to apply for the DIN. This can be done in SPICE form along with the name and address proof of the proposed directors.
3) Approval of name - The next step in an OPC registration is the approval of the name of the company. Approval name can be obtained by filing the application in Form SPICE-32 or by using Reserve Unique Name (RUN) web services of Ministry of Corporate Affairs by selecting 1 preferred name. Name requires to be approved by the Ministry of Corporate Affairs.
4) Filing of forms - Applicant seeks to register an OPC has to fill up form with necessary documents. All those documents and form will be uploaded in the site of Ministry of Corporate Affairs for approval.
5) Issuance of Certificate of Registration - After completion of the verification process, the Registrar of Companies will issue a certificate of registration. After obtaining a registration certificate one can start the business.
IV) Documents Required for One Person Company Registration
For registration of One Person Company you have to submit certain documents. List of the documents need for one person company registration is listed below.
1) Memorandum of Association
2) Articles of Association
3) PAN card, Aadhar Card
4) Proof of the registered office of the proposed company along with ownership proof
5) No objection certificate of the owner
6) Affidavit of the proposed director
7) Declaration of the professional for production of all the documents
Conclusion
One person company extends the concept of limited liability to a company run by a single person. If there is only one promoter or founder then one person company is the best way to start a company
Corpbiz is an award-winning company in respect of providing service of one person company registration. If you are planning to take one person company registration, then contact Corpbiz, you can get best and affordable service.
Source url - https://www.storeboard.com/blogs/legal/the-ultimate-deal-on-one-person-company-registration-in-india/954575
