The procedure for incorporation of NBFC under Companies Act, 2013 has been further made easy. The streamlining being done is as follows: Now an NBFC can be directly registered with MCA. No prior approval is required from RBI. RBI comes into picture only post the incorporation of the NBFC i.e Private/Public Company. Without receiving the NBFC license from RBI, no company can b......

On February 21, 2019, the Ministry of Corporate Affairs (MCA) has introduced the new e-Form 22A, of Companies (Incorporation) Amendment Rules, 2019. Also known as e-Form ACTIVE (Active Company Tagging Identities and Verification), it introduces KYC for the companies. Applicable on: It is applicable to all companies incorporated on or before December 31, 2017. The companies that are NOT......

Garner all information about Phantom Stocks & how they work!   In today’s cutthroat competition prevailing in corporate sectors like e-commerce or start-ups, etc., employees have plenty of job opportunities and they are lured not only by high pay packages but also by the various perks and incentives. Under such circumstances, the companies have to work towards incentivizing their ......

NBFCs Do Matter! The Non-Banking Financial Companies (NBFCs) are playing a pivotal role in India’s growth story in recent years. With RBI relaxing the norms for NBFCs, there has been a spate of registrations. The financial needs of such a huge population are hardly catered to by a limited number of Banks and sensing this gap the private players have jumped to occupy this space.   ......

An Easy Resolution To A Grim Situation! Quite a few positive news, from various Courts, has trickled in regarding the removal of Directors disqualification. In a major victory for the aggrieved Directors, in December 2018, the Gujarat High Court quashed the MCA list of September 12, 2017, and in addition, started granting interim relief leading to activation of DINs. Likewise, High Courts of Karn......

After the liberalization of the Indian economy in 1991, India has witnessed a significant interest of foreign investors in the Indian  Non-Banking Financial Company (NBFC)   sector.  While the provisions of foreign investment and foreign exchange are now regulated by the FEMA, 2000, the working and operations of NBFCs are regulated by the Reserve Bank of India (RBI) within the frame......

Non-Banking Financial Companies play a vital role in promoting inclusive growth in the country by catering to the diverse financial needs of the customers excluded by the banks. They provide financial services to the micro, small and medium enterprises or those individuals who are not able to take services from banks. They have a generous contribution to the employment generation, wealth creation;......

There are different types of Non-Banking Financial Companies (NBFCs) licensed by RBI. NBFCs are classified (a) by the type of liabilities into Deposit and Non-Deposit accepting NBFCs, (b) by their size of non-deposit taking NBFCs into systemically important and other non-deposit holding companies (NBFC-NDSI and NBFC-ND) and c) by the kind of activity they conduct. In a modern approach based on th......

A  Reserve Bank of India press release dated 08/04/1999 explains that a  company will be treated as an NBFC if its financial assets are more than 50 percent of its total assets,  and income from financial assets should be more than 50 percent of the gross income. Both these tests are required to be satisfied as the determinant factor for the principal business of a company. The que......

The Insolvency and Bankruptcy Code 2016 not only enables the insolvency proceedings of the insolvents but also the code contains provisions for solvent entities that want to themselves surrender their business and refrain from carrying on their business. To be eligible for voluntary liquidation, the solvent entity must be in a state to pay off its debts. The Central Government on 30th March 2017 ......

Employee Stock Ownership Plan also commonly known as ESOP, is a skillful and well-defined plan that is meant to provide an advantage to both the employee as well as the employer, in which an employee mainly invests in the stock of the sponsoring company.   The main motive of the Employee Stock Option Plan is not only to maintain the focus of the employees on their company’s overal......

Dear Professional Colleagues,The Reserve Bank of India has presented another class of non-banking finance company, NBFC-Factor. A factor is an organization which purchases another organization's records receivable (solicitations) at a markdown, accept credit danger of the record and recuperates money toward the finish of the credit time frame. The Non-Banking Financial Company-Factors (NBFC-......

The Insolvency and bankruptcy code was notified and came into execution since December 2016. The code at its entry stage repealed the existing legislation which had become outdated and unfruitful with the passage of time. The code is not an easy legislation as the drafters have really worked hard to create a masterpiece legislation that can cater solutions to all sorts of disputes in a time-bound ......

SOCIETY INTRODUCTION An association of several individuals who combined together for usually achieving the purpose of advancement of charitable activities like sports, music, culture, religion, art, education, etc it will be deemed as a society. In India, a society can be registered as a legal entity via following eh procedure mentioned under The Society Registration Act, 1860 which lays down c......

Top 5 Facts to Know about Insolvency and Bankruptcy Board Meetings Fact #1: At Least 4 meetings are to be done in a year and 1 meeting in a quarter. Fact #2: The Chairperson (or one nominated by Chairperson) heads the meeting Fact #3: Any 3 members are required to start the meeting Fact #4: The meeting will be held at time and place (generally at headquarters) mentioned in the ......

One of the strata of business which can give you a substantial level of profit is no other than the cash trade. In this sort of business, what you have to get associated with is cash and budgetary exchange. Through this, you will have a vast measure of additions which can make you ready to battle subsidence whenever. In the event that you know how to work this sort of business legitimately, y......

In this article, we will discuss DIN, its associated concepts and facets. What is DIN? DIN stands for Director Identification Number. It is an eight-digit unique number allotted by the Ministry of Corporate affairs, Central Government of India to a person who wishes to become a director in the company. DIN is person specific i.e. unique for a particular person. DIN provides distinguished identi......

Dear Professional Colleagues,Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, and it deals in the business of loans and advances, acquisition of shares,  bonds/stock/ debentures/securities issued by Government or local authority or other securities of marketable nature, hire-purchase, leasing, chit business insurance business. But it does not include any i......

1#: THE DAWN OF MODI ERA, 2014: The sunset of the UPA govt. was predicted even before the elections took place. The final phase of Mr. Manmohan Singh’s regime was marred in controversies of laxity and corruption. The economic condition was precarious; cases of corruption, fraud, money laundering, black money hoarding, etc. resulted into low GDP growth and high inflation. The sentiments......

Dear Professional Colleagues,After the liberalization of the Indian economy in 1991, India has witnessed a significant interest of foreign investors in the Indian  Non-Banking Financial Company (NBFC)   sector.  While the provisions of foreign investment and foreign exchange are now regulated by the FEMA, 2000, the working and operations of NBFCs are regulated by the Reserve Bank of......

Dear Professional Colleagues,While Non-Banking Financial Companies (NBFCs) in India are doing well, there is a growing interest in the country to register new companies. It is, therefore,   important to know the eligibility norms to start an NBFC business. The following paragraphs intend to highlight such essential norms for different types of NBFCs.Requirements for registration of NBFCs......

Dear Professional Colleagues,With a high growth rate every year, there are many ways in which internet has affected the financial services sector including the NBFCs in India. To differentiate their services and gain an advantage over the rising competition, the Non-Banking Financial Companies (NBFC) are trying to provide their services online to the customers. This is one of t......

Dear Readers,In this Article, we will discuss about the solutions that can be provided to Aggrieved Persons (Directors) even after the expiry of the CODS Scheme, 2018, Grounds on which an appeal can be filed before the High Court, National Company Law Tribunal, Benefits available to the Directors after the expiry of the CODS Scheme, 2018 etc. A Writ of Certiorari can be filed under Article 226 of......

Dear Professional Colleagues,NBFCs as financial institutions refer to a set of rules and regulations which keep on changing on the basis of changing needs and situations. It is important for the NBFC management to know what to do and how to do, and there is a strong need to keep abreast with the times. The managers who follow the rule book or the manual of NBFCs have a strong chance of compliance......

Dear Professional Colleagues,While Non-Banking Financial Companies (NBFCs) in India are doing well, there is a growing interest in the country to register new companies. It is, therefore,  important to know the eligibility norms to start an NBFC business. The following paragraphs intend to highlight such essential norms for different types of NBFCs.Requirements for registration of NBFCs with ......

Dear Professional colleagues,Industry benchmarking is used to establish performance standards and detect trends in a broader competitive environment. Non-Banking Financial Corporations (NBFCs) see benchmarking as a tool to compare product attributes, quality, operations, and processes. It is recognized that besides competition and other factors; laws, rules, and regulations contribute to......

Dear Professional Colleagues,The non-banking financial companies (NBFCs) which are heterogeneous in nature in term of activities and size are important financial intermediaries and an integral part of the financial system in India. They have been able to carve out a niche for themselves in meeting the credit needs of both wholesale and retail customers. “While the NBFCs have earned a respec......

Dear Professional Colleagues,Market Regulator RBI has issued various Show Cause Notices to Non-Banking Finance Companies who have failed to communicate the name, designation and address of the principal officer to Financial Intelligence Unit- India (FIU-IND) as directed in respect of Cancellation of Certificate of Registration for violations and non-compliances to carry on the business of non......

Dear Professional Colleagues,Non-Banking Financial Companies (NBFCs) have been making important contributions to India’s economy. However, the Reserve Bank of India (RBI) still controls the working of all NBFCs under the framework of RBI Act, 1934 and directions issued by it from time to time.   -Isha Malik (Company Secretary, MUDS Management Pvt Ltd) Every NBFC, in order to carry out......