Modes of Organizations for Starting Finance Business in India

Can an Individual Do a Money Lending Business?

Documents Required:

• Application Form: Get the specified application form from the respective authority (usually the District magistrate’s office) or download it online.
• Identity Proof: The applicant must submit copies of their Aadhar card, Passport and Voter ID as identity proof.
• Address proof: Applicant must submit documents like the electricity bill, utility bill or rental agreement as proof of your business address.
• Income Proof: Applicant may need to present the income source, including the bank statements, to establish your financial stability.
• Character certificate: Arrange a character certificate from a respected gazette officer to prove good character.
• Business Plan: An Outline of your business plan, including the financial projections, scale of operations and target market.
• No Objection Certificate: A No Objection Certificate will be needed if the registered premises for the business operation are not in the name of the applicant, the property owner.

Yes! An individual can pursue a money lending business, but with some conditions, especially in India, an individual can become a money lender and get started in this business. However, meeting the specific criteria and obtaining the license to operate legally is crucial.

Requirements for Registration:

1. Application with the signature of all members

2. Bye-laws of the society containing:

(a) Name, address and aims and objectives of the society;

(b) Names, addresses and occupations of members;

(c) Mode of admitting new members;

(d) Share capital and its division.

A Company registered under Companies Act 2013 and desirous of commencing the business of Non Banking Financial Institutions as defined under Section 45 (1)(a) of RBI Act, 1934 should have a minimum new owned fund of Rs. 2 crores. Companies are required to submit its applications for registration in the prescribed format along with necessary documents with Reserve Bank of India for their verifications and in case the RBI is satisfied with the intention of promoters and the documents being provided by them, the certificate of NBFC shall be issued to them which comprises of two category.

Documents Required for NBFC

• The company’s management system details information along with the company’s brochure.
• Copy of PAN card or the CIN (Corporate Identity Number) of an Applicant
• Documents of Applicant Company Address and location.
• MOA (Memorandum of Association) and AOA (Article of Association) certified copy.
• Duly Signed List of Directors by each Director of a Company
• Submission of Company’s Director CIBIL scores or credit reports.
• A statement copy of the board resolution stating that the concerned company is not engaged in financial services and won’t unless an NBFC registration is issued.
• A certificate stating that a company is not holding any kind of public deposit issued from the concerned authority and also not accepting the same.
• A copy of the company’s board resolution shows that the applicant company is complying with the Fair Practices code in its business operations.
• A document showing the applicant’s company NOF or Net owned fund.

Documents Required for Nidhi Registration

The following are the required documents for Registering as a Nidhi:

• Proof of registered business address (ownership documents/rent or lease agreement)
• No Objection Certificate (NOC) from the owner/landlord
• Identity and address proofs of members
• Photos and PAN card copies of members
• Digital Signature Certificate (DSC)
• Director Identification Number (DIN) of directors
• Memorandum of Association (MoA) with the objective of promoting thrift and savings among members, accepting deposits, and providing loans to members only
• Articles of Association (AoA)