NBFC is a company which is carrying on the business of acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business as its principal business activity.
Investment Company (IC): IC means any company which is a financial institution carrying on as its principal business the acquisition of securities.
Since the main objective of the company is to invest in listed Securities and the majority income will be from investment activity so the company has to register as NBFC – IC.
Requirements of a Company to Register as NBFC;
1. Company is to be registered as per the Companies Act 2013.
2. The Company must have Net Owned Funds (Paid-up Share Capital & Reserves) of Rs. 10 Crores.
Registration Procedure:
- The Applicant has to apply online and submit the physical documents at the regional RBI office.
- 6 to 9 months from Physical submission of Documents to RBI Head Office.
Check List for Registration of NBFC - IC:
1. Certified copy of Certificate of Incorporation of the company.
2. Extract of Main Object Clause in MOA.
3. Credit Bureau Report pertaining to the directors of the company.
4. Copy of experience certificate in the financial services sector in respect of all the directors/promoters.
5. Extract of the Board Resolution for
a. Application with RBI stating Authorised Signatory.
b. To the effect that the company has not accepted/solicited any public deposit and will not accept the same in future without the prior approval of Reserve Bank of India in writing.
c. Stating that the company was not trading/ will not trade in its investments in shares, bonds, debentures, debt or loans in group companies except through block sale for the purpose of dilution or disinvestment
d. Board resolution stating that the company does not carry on any other financial activity referred to in Section 45I(c) and 45I(f) of the Reserve Bank of India Act, 1934.
6. Statutory Auditor/s Certificate certifying the net asset size of the company and investment in group companies as percent of its net assets.
7. Business plan of the company for the next three years along with its projected Balance Sheets for next 3 to 5 Years.
8. Self-declaration about any penalty imposed by Government authority / Charge sheet/ NI 138 proceeding etc.
9. Information on the Management (IOM) separate for Each Director.