Section 8 Microfinance Company Registration- A complete guide

Microfinance is not just about giving out small loans. It is about helping people build their future, supporting women entrepreneurs, and making sure that even the smallest businesses have access to financial resources. In India, where many still face challenges in reaching formal banks, microfinance companies act as a bridge that connects underserved communities with affordable credit.

If you are someone who wants to combine social service with financial empowerment, Registration of Section 8 Microfinance Company can be the right choice. Registered under the Companies Act, 2013, this type of company works with charitable objectives and provides micro-lending facilities without the heavy capital requirements and also does not require RBI approval to start operations.

This option is especially suitable for NGOs, social entrepreneurs, and impact-driven individuals. It offers the advantage of tax benefits, eligibility for CSR funding, and greater trust from donors and investors.

In this article, we shall walk you through the complete step-by-stepprocess of registration of Section 8 Microfinance Company in India, along with eligibility conditions, required documents, compliance needs, and estimated costs. By the end, you will have a clear roadmap to start your own social finance journey.

Table of Contents

Why Registration of Section 8 Microfinance Company is the Best Choice for Social Finance?

Registration of Section 8 Microfinance Company comes with multiple advantages that make it an ideal structure for combining social objectives with financial empowerment.

Works with Charitable Objectives – Registration of Section 8 Microfinance Company promotes social welfare by offering affordable financial aid to low-income groups and underserved communities.
Simpler to Set Up than NBFC-MFI – Unlike NBFC-MFIs that require a minimum capital of ₹10 crore and RBI approval, Registration of Section 8 Microfinance Company can be done with much lower compliance requirements.
Credibility and Legal Recognition – Section 8 Microfinance Company registered under the Companies Act, 2013 adds transparency, trust, and recognition, which strengthens partnerships with donors, banks, and stakeholders.
Access to Government Schemes and Subsidies–A Section 8 Microfinance Company can benefit from various government welfare programs and subsidies that support financial inclusion, making it easier to expand outreach and impact at lower costs.
Tax Exemptions: –Section 8 Companies are eligible for certain tax reliefs under the Income Tax Act when they obtain registration under provisions like Section 12A and 80G. However, opting for registration under both 12A and 80G is generally not advisable for Section 8 Companies.

These benefits not only simplify the process of running a microfinance initiative but also enhance credibility, funding opportunities, and long-term sustainability.

Registration of Section 8 Microfinance Company:-Key Features

Features of Registration of Section 8 Microfinance Companymake it one of the most affordable and less-regulated structures to promote financial inclusion in India.

Feature	Explanation
RBI Approval Not Required	Section 8 MFCs are exempted from seeking RBI registration, saving time and compliance costs.
No Minimum Paid-up Capital	Unlike NBFCs (₹10 crores) and Nidhi Companies, there is no fixed capital requirement, making entry easier for NGOs and small groups.
Lighter Compliance Burden	Section 8 MFCs are governed only by Companies Act, 2013 with basic annual filings; no RBI returns or strict NBFC compliances apply.
No Public Deposits Allowed	To protect investors, these companies cannot accept deposits from the public. Funds can only come from internal sources, grants, or borrowings.
Loan Limits Defined	Eligible to give loans up to: – ₹50,000 for businesses ₹1,25,000 for housing-related needs.
Regulated Interest & Charges	Though RBI does not regulate Section 8 MFCs directly, but they are expected to follow RBI guidelines on interest rates and processing fees to safeguard borrowers.
Exemptions under RBI Circular	As per RBI’s Master Circular (RBI/2009-10/6, dated July 1, 2009), Section 8 Companies engaged in microfinance enjoy significant exemptions. They are not required to: Obtain RBI registration under Section 45-IAMaintain liquid assets under Section 45-IBCreate a reserve fund under Section 45-IC Note: – These relaxations are valid only if: Loans are limited to ₹50,000 for business and ₹1,25,000 for housingThe company does not accept public deposits

Eligibility Criteria for Registration of Section 8 Microfinance Company

Before initiating the process of Registration of Section 8 Microfinance Company, it is important to understand the minimum eligibility requirements that every Section 8 Microfinance Company must meet.

Criteria	Requirement
Number of Directors	At least 2 directors for a private company and 3 directors for a public company. One director must be an Indian resident.
Membership	A minimum of 2 members is needed. In a private company, the maximum is 200 members, while in a public company there is no upper limit.
Business Objective	The company must aim to provide financial assistance with a focus on financial inclusion, rural development, SHG support, women empowerment, and poverty reduction through micro-lending.
Profit Utilization	Earnings cannot be distributed as dividends. All surplus funds must be reinvested to achieve the company’s stated social and financial goals.
Company Name	The name should include terms like Microfinance, Microcredit, or Micro and end with words such as Foundation, Association, Forum, or Council. The words Limited or Private Limited are not permitted.
Capital Requirement	There is no fixed minimum capital, but adequate funds should be arranged to meet operational and lending needs.
Registered Office	A valid office address with acceptable proof (such as rent agreement or utility bill) must be submitted at the time of incorporation.

Fulfilling these conditions ensures smooth approval of your application and lays a strong foundation for operating as a compliant and credible microfinance company.

Step-by-Step Process of Registration of Section 8 Microfinance Company

Registration of Section 8 Micro finance Company in India involves a series of legal and compliance steps. Here’s a simplified process:

1- Choose a Unique Company Name

Select a meaningful name that reflects the charitable or social mission.
Ensure it is not already registered or trademarked to avoid conflicts.
Not sure how to pick the perfect name for your Section 8 Company? Refer our article: –

https://www.mylegalbusiness.com/blog/how-to-choose-a-perfect-company-name/

2- Obtain Digital Signature Certificate (DSC)

Mandatory for all directors and members to digitally sign incorporation forms.
Serves as a secure digital identity for filing on the MCA portal.

3- Apply for Name Approval (SPICe+ Part A)

Submit the chosen name with a brief objective on the MCA portal.
Approval usually takes a few working days if guidelines are met.

4- File Incorporation Documents

Complete SPICe+ Part B form along with MOA, AOA, INC-9, and AGILE-PRO)
These cover objectives, governance, and registrations (GST, EPFO, ESIC, bank account, etc.).

5- Obtain Certificate of Incorporation (COI) & Section 8 License

Once verified by the Registrar of Companies, you receive the COI and license.
This confirms your legal status and Company Identification Number (CIN).

The process of Registration of Section 8 Micro finance Company is completely online, cost-effective, and streamlined under the MCA portal. Once incorporated, the company gains legal recognition to extend micro finance services and apply for grants, loans, and CSR funding.

Documents Required for Registration of Section 8 Microfinance Company

When applying for the registration of a Section 8 Microfinance Company in India, certain documents must be furnished to verify the identity of directors, shareholders, and the registered office address. Below is a category-wise list for your reference.

Category	Documents Needed
For Directors and Shareholders	PAN Card Aadhaar Card / Passport / Voter ID / Driving License Passport-size Photograph Address Proof (Bank Statement, Electricity Bill, or Telephone Bill not older than 2 months)Digital Signature Certificate (DSC)
For Registered Office	No Objection Certificate (NOC) from the property owner Utility Bill (Electricity, Water, Gas, or Property Tax Receipt not older than 2 months)

Having these documents ready in advance ensures a smoother registration process and reduces the chances of delays in obtaining approval for your Section 8 Microfinance Company.

Estimated timeline of Registration of Section 8 Microfinance Company

The time required for Registration ofSection 8 Microfinance Company depends on document readiness, approvals, and government processing. Below is an approximate timeline for each stage of the process.

Stage	Process	Estimated Timeframe
Step 1	Obtaining Digital Signature Certificate (DSC) for directors	0 – 1 working days
Step 2	Name Reservation through SPICe+ Part A	2– 3 working days
Step 3	Drafting MOA & AOA	0– 1 working days
Step 4	Filing SPICe+ Part B and issuance of Certificate of Incorporation (COI)	5 – 7 working days
Total Estimated Timeline	From document preparation to incorporation	07 – 10 working days

With proper planning and complete documentation, the registration of a Section 8 Microfinance Company can typically be completed within 10 days, though timelines may vary depending on government approvals and state-specific requirements.

Conclusion

Registration of Section 8 Microfinance Company in India is one of the most effective ways to combine financial services with social responsibility. Unlike traditional NBFC-MFIs, it does not require heavy capital investment or RBI approval, which makes it a more accessible option for NGOs, social entrepreneurs, and impact-driven individuals. With benefits such as eligibility for CSR funding, access to government schemes, tax exemptions, and credibility among stakeholders, this structure offers both flexibility and long-term sustainability.

The registration process may seem detailed, involving steps like obtaining DSC, applying for name approval, and finally receiving the Certificate of Incorporation. However, with proper preparation of documents and professional guidance, the entire process can be completed smoothly within 07–10 working days.

If you are planning the registration of a Section 8 Microfinance Company, it is the right time to take the first step with My Legal business LLP. We plan the right strategy and ensure proper and timely compliance where your initiative create a lasting impact on society while enjoying the benefits of a well-structured organization.