NBFCs come under the purview of the RBI Act, 1934, an entity desirous to act as a non-banking financial institution has to register under the companies Act, and apply for the license by filing an application in the prescribed format.
However, before applying for the registration it is necessary to know the types and categories as the regulator has classified these institutions on basis of their business activities.
Asset Finance Company: The NBFCs registered under this category carry activities related to financing for assets such as industrial machines, automobiles, tractors, generators, material handling equipment and lathe machines.
Investment Company: These financial institutions carry on activities related to the acquisition of financial securities such as shares, stocks, and bonds.
Loan Company: As per Wikipedia loan company is a financial institution carrying the principal business activity of providing finance in form or loans or otherwise for an activity other than its own.
Infrastructure Finance Company: A company deploying 75 % of its assets in infrastructure loans having a minimum net owned funds of Rs 300 crore, a credit rating of ‘A’, and a CRAR of 15%.
Residuary Non-Banking Companies (RNBCs): A class of NBFC which has the principal business of receiving deposits under any scheme.
For NBFC company registration, there are many consultancies providing legal services helping in the formation and commencement of NBFCs.