Chit Fund Company and its Registration Process
October 9, 2019
Chit Fund Company
A Chit Funds is a prominent kind of investment funds that operate in India as a principal part of the disorderly currency advertise industry. As well as Chit stores give access to investment funds and borrowings for individuals with constrained access to managing account offices. Thus, Chit stores are controlled by Chit Fund company, we take a glimpse at chit subsidize organizations, chit finance plan of action and chit finance business enlistment in India.
However, Chit fund business in India is managed under the Chit Fund Act, 1982. According to the Act, a “Chit” implies to an exchange whether called chit, chit finance, or by some other name by or under which a man goes into synchronism with a predetermined number of people. In which each one of them will buy in a specific total of cash (or a specific amount of grain rather) by method for periodical portions over a clear period and that each such endorser will, in his turn, as controlled by part or by closeout or by delicate or in such other way as might be determined in the chit understanding, be qualified for the prize sum.
Therefore, An exchange isn’t a chit if some alone, however not all, of the supporters get the prize sum with no risk to pay future memberships or every one of the endorsers gets the chit sum by turns with an obligation to pay future memberships.
Steps to Register Chit Fund Company
Given below are the steps required to be followed for registering are :
Step 1. Apply for Digital Signature Certificate (DSC) and Director Identification Number (DIN)
The initial step to consolidate a Chit Fund Company is to apply for DSC and DIN numbers. However, this is the prime and premier prerequisite to register any organization in India.
Step 2. Apply for Name endorsement of Chit Fund Company
The second step is to pick an organization name. Picking an organization name is an imperative task since it is the name which mirrors the business personality. Therefore, in any case, before picking the organization name the below-mentioned points must be taken into consideration:
- The name must be interesting and shouldn’t resemble any current organization’s name.
- The name must not duplicate with any currently enrolled trademark.
- The Company must use “Chit Fund” as a prefix/suffix in the organization’s name.
Step 3. Set up Reports as per Chit Fund Company goals
Once the organization name is endorsed. All the fuse records are set up as per the Chit Fund Act, 1982 and Companies Act, 2013 and rules made thereunder. However, the most essential records to be readied which are added to be enrolled in the chit support enlistment center are the Memorandum of Association (MOA) and Articles of Association (AOA).
Step 4. Least Capital Requirement for Chit Fund Company
The base capital prerequisite for Chit support organization registration is Rs.1 lakh. At the end of the day, just in case you need to begin a Chit subsidize organization. However, at that point, you should enroll an organization with Rs.1 lakh capital. Accordingly, RBI capital prerequisites are not admissible to Chit Fund Company in India.
Step 5. Apply for Chit Fund Company enrollment
When you are set with all the required reports, the next stage is to file a petition for chit subsidize organization enrollment. The ROC refuses the approval until it is satisfied with all the company’s accommodation.
Mentioned below are the documents required while registering for Chit Fund Company:
- PAN card
- ID proof
- Bank statement/Electricity bill/Mobile bill/telephone bill – Anyone.
- Other documents as per Chit registrar
Documents for Address proof :
- Ownership document or rent agreement
- Electricity bill
- Copy of NOC