Section 8 Micro Finance Company Registration
Starting from ₹999/-
Table Of Content
- Section 8 Micro Finance Company Registration Made Easy
- Benefits of Section 8 Micro Finance Company Registration
- Eligibility For Section 8 Micro Finance Company Registration
- Process for Section 8 Micro Finance Company Registration
- Documents Required for Section 8 Micro Finance Company Registration
- FAQs
- Get in Touch with us
Section 8 Micro Finance Company Registration Made Easy
Section 8 Microfinance refers to a type of microfinance institution that is registered under Section 8 of the Companies Act in India. These institutions are established with the primary objective of promoting financial inclusion and providing microcredit and financial services to low-income individuals, small businesses, and marginalized communities.
Unlike traditional financial institutions, Section 8 Microfinance entities operate as non-profit organizations, focusing on social impact and community development rather than profit generation.
They typically offer small loans, savings products, insurance, and other financial services tailored to the needs of underserved populations, aiming to empower them economically and improve their livelihoods.
Benefits of Section 8 Micro Finance Company Registration
Social Impact
By focusing on financial inclusion, a Section 8 Microfinance Company addresses the needs of underserved communities, providing them with access to credit, savings, and other financial services. This leads to increased entrepreneurship, poverty reduction, and overall economic empowerment at the grassroots level.
Non-profit Status
Operating as a non-profit entity allows the microfinance institution to prioritize social impact over profit-making.
This status attracts socially conscious investors, donors, and philanthropic organizations who are more inclined to support initiatives that align with their values and contribute to positive social change.
Tax Exemptions
The tax-exempt status of Section 8 Microfinance Companies relieves them from certain tax obligations, enabling them to allocate more resources toward their mission and expand their outreach.
This financial advantage translates into greater support for clients and community projects without compromising financial sustainability.
Credibility and Access
Registration under Section 8 enhances the credibility and trustworthiness of the microfinance institution in the eyes of stakeholders, including clients, investors, regulatory bodies, and the general public.
This credibility opens doors to partnerships, collaborations, and funding opportunities from government agencies, financial institutions, impact investors, and international organizations.
Capacity Building
Section 8 Microfinance Companies can benefit from capacity-building initiatives, training programs, and technical assistance provided by industry experts, regulatory bodies, and development organizations.
This support helps them improve operational efficiency, risk management practices, governance standards, and impact measurement, ensuring sustainable growth and effective delivery of services to beneficiaries.
Eligibility For Section 8 Micro Finance Company Registration
Process for Section 8 Micro Finance Company Registration
Step 1
Application for Name Approval
- Submit two proposed names for the company along with the objective/purpose of business activity and statutory fees to the Ministry of Corporate Affairs (MCA).
- Ensure the names are unique and do not contain punctuation marks. Upon approval, the name is valid for 20 days.
Step 2
Digital Signature Certificate Application
- Apply for DSCs for all directors and shareholders of the Section 8 Microfinance Company.
- This is a crucial step for filing documents online and can be done concurrently with the name approval application.
Step 3
Documents Preparation and Form Submission
- Prepare and file various forms required for incorporation, such as Spice + Part, Agile Pro, Spice MOA, Spice AOA, and INC 9 forms with the MCA.
- These forms contain information about the company’s registered office, authorized capital, shareholding pattern, directors, shareholders, and other details.
Step 4
Obtain Incorporation Certificate
- After submitting the documents and verification by the Registrar of Companies (ROC), you will receive the Certificate of Incorporation within 45-60 working days.
- This certificate acts as the company’s birth certificate and includes details such as the company name, registered address, Corporate Identity Number (CIN), and other relevant information.
Step 5
Bank Account Opening
- Open a bank account in the company’s name and deposit the proposed paid-up capital. Submit the incorporation certificate, Memorandum of Association (MOA), Articles of Association (AOA), and other necessary documents to the bank.
- File INC-20A with the MCA to obtain the certificate of commencement, allowing the company to begin its operations.
Documents Required for Section 8 Micro Finance Company Registration
For each Directors and Shareholders
For Address Proof of the new company
Additional Requirements For Foreign Nationals
FAQs
What is a Section 8 Microfinance Company?
A Section 8 Microfinance Company is a non-profit organization established under Section 8 of the Companies Act, 2013, with the primary objective of promoting charitable, educational, social, or other useful purposes related to microfinance and financial inclusion.
What are the eligibility criteria for forming a Section 8 Microfinance Company?
The eligibility criteria include having a non-profit objective, a minimum of two directors, Indian resident directors, compliance with Section 8 regulations, and alignment with permissible objectives under the Companies Act, 2013.
What documents are required for Section 8 Microfinance Company registration?
Documents such as Memorandum of Association (MOA), Articles of Association (AOA), digital signature certificates (DSCs) for directors, identity and address proofs of directors, registered office proof, and name approval documents are required.
Is there a minimum capital requirement for Section 8 Microfinance Companies?
No, there is no minimum capital requirement for Section 8 Microfinance Companies. They are not required to have a specific amount of capital but should have sufficient funds for their operations.
Can foreign nationals be directors of a Section 8 Microfinance Company?
Yes, foreign nationals can be directors of a Section 8 Microfinance Company, provided they comply with the requirements of the Companies Act, 2013, and have valid residency permits or visas.
How long does it take to register a Section 8 Microfinance Company?
The registration process typically takes around 45-60 working days, depending on the completeness of documents submitted, approvals from regulatory authorities, and processing time by the Ministry of Corporate Affairs (MCA).
What are the tax benefits for Section 8 Microfinance Companies?
Section 8 Microfinance Companies enjoy tax exemptions on income generated from their charitable activities, donations received, and certain other sources as per the Income Tax Act, of 1961.
Can a Section 8 Microfinance Company provide loans and financial services?
Yes, Section 8 Microfinance Companies can provide micro-loans, financial services, savings products, and other financial assistance to low-income individuals and communities, promoting financial inclusion.
Is it mandatory to conduct annual audits for Section 8 Microfinance Companies?
Yes, Section 8 Microfinance Companies are required to conduct annual audits of their financial statements by a qualified auditor as per the Companies Act, 2013.
Can a Section 8 Microfinance Company convert into a for-profit entity in the future?
No, a Section 8 Microfinance Company cannot convert into a for-profit entity. It must maintain its non-profit status and continue to operate for charitable purposes as specified in its MOA and AOA.