If you want to start a new Asset financing company, then not being familiar with all the legalities involving various legal and regulatory processes could prove to be a roadblock for your success. Many new players are trying to enter the Indian market by registering as Vehicle/Asset financing companies in India to utilize its ample resources and business potential. MUDS Management Consultancy Firm helps new businesses in registering as Asset Financing Companies or AFCs or other such Non-Banking Financial Companies (NBFCs) in India with the complete process.
Read on to know how to start a new Asset Financing Company in India and how MUDS can help you to make the complete process hassle-free.
How to Start Asset/Vehicle Finance Company
The Government of India is focussing on accelerating the development of the manufacturing sector under the “Make in India” initiative. To take advantage of this push by the government many new industrial start-ups are entering the Indian market. All these start-ups need financial assistance to buy industrial machinery and related products to set up their manufacturing units across the country.
This paves way for new asset finance companies to give loans to these manufacturers. Therefore, many new companies are looking to register themselves as NBFCs to establish their place in the market and take advantage of the current situations where the country is looking to boost the overall manufacturing sector. The market of automobiles production is also going through radical changes especially after the arrival of electric vehicles. Hence, vehicle financing is also picking up as the government is planning to revamp its public transport system. Replacement of conventional rickshaws with E-rickshaws is also part that plan and therefore, the demand for E-Rickshaw finance from NBFCs is increasing. All of this makes the prospect of setting up a new Asset finance company a profitable venture. So, if you are looking to set up a new asset financing company then you can contact MUDS Management Consulting Firm to get complete info and all the help to set up your company. Here is the overview of the steps to get started.
First, you must have the following set of documents ready for registration of your business:
- ID Proof (Could be Aadhar Card, Voter ID Card, Passport or Driving License)
- Copy of PAN Card
- Passport Size Photos
- Address Proof (Bank Statement, Telephone bill, Mobile Bill, and Electricity Bill)
- Ownership Documents or Rent Agreement for office space
- Electricity bill
- No Objection Certificate from the owner for rented property
- CIBIL records of all shareholder (more than 10% share in Company) and directors
- Education & Experience proof of promoters
- Fixed deposit of Rs. 2 Cr for the Purpose of NOF requirement
- Net worth certificate of directors and shareholders
Now, let’s understand the procedure of starting a new Asset Finance Company in a step by step manner.
- Register Your Asset Finance Company Under the Companies Act, 2013. MUDS Management’s legal team helps companies in the registration process with Reserve Bank of India by streamlining the process of collecting all necessary documents and ensuring strict adherence to the policy followed for registration. The Asset Finance Company can be registered as a private or public company depending upon the choice of its founders.
- Raise Authorized Paid-up Capital of Up to Two Crores: The company has to raise an authorized and paid-up capital of about 2 crores to meet the required standards of registration.
- Depositing the Sum in Bank and Getting Certificate: After raising this sum the company is required to open a fixed deposit account in a bank and deposit this money. After this, they must obtain a Certificate of no lien from the bank to move forward with the process of registration.
- Getting All the Certified Copies to Complete the Checklist of RBI Registration: The company should compile the following set of documents along with the documents mentioned above to complete the checklist required for registration.
- Certified Copy of Certificate of Registration
- A copy of Fixed Deposit receipt and bankers’ certificate of lien indicating balances in support of Net Owned Funds.
- Bankers Report for Applicant Company/ group companies
- Certified copy of an extract of the main object clause in the MOA (Memorandum of Association) relating to the financial business.
- Certified Copy of the Board resolution
- Fill Online Application: Once you have all the documents ready for registration, fill the online application form for NBFC registration as an ASSET FINANCE COMPANY (AFC). After filling the form, the company will get an auto generated Company Application Reference Number or CARN.
- Submit the Hard Copy of Application to RBI’s Regional Office: After filling the online application form and getting the CARN for your company, the hard copies of all the necessary and supporting documents must be compiled with the application form. Now, all these documents with the application form should be submitted to the regional RBI Office to complete the process of registration.
How Muds Management Assist in Registration?
Now, we understand that running a Vehicle/Asset financing firm in India requires registration with the Reserve bank of India. The process for the same is outlined in the above sections. However, this process proves to be cumbersome and time taking for founders of NBFCs and therefore, taking assistance from MUDS management can help to save time and the hassle of the registration process.
Being one of the best management consulting service providers, MUDS management has worked with top NBFCs in India over the years of its operation. With the experience of assisting many clients in legal and regulatory services across different domains, you can rely on MUDS Management to get the best services for your business. You can reach out to MUDS Management Consulting for assistance on new NBFCs registration by contacting them on +91 9599653306 or by email on [email protected].