NBFCs or Non-Banking Financial Companies are those companies which have been established either under
the Companies Act of 1956 or 2013. They have been playing a vital role in the development of the Indian
economy by bringing accessibility, diversity, convenience, and efficiency into the financial sector.
They are involved in the principal business of providing loans and advances, acquisition of shares,
stocks, bonds, insurance business, etc.
If you want to buy NBFC online in India, you can choose between two options:
As in most other cases, the time taken to buy-out an existing business is quicker than establishing a new one. Buying an NBFC takes around 2-3 months, whereas getting a new company established and then registered with RBI as an NBFC can take anywhere between 3-6 months. Moreover, building a business up from scratch will take a lot of time and effort.NBFC has been put up for sale, and you have the chance to buy NBFC online in India. Or, if you have zeroed in on an NBFC to buy, which is not on sale, you can do so by acquiring its control via deliberate planning. This acquisition is done without the knowledge of the seller, especially if the seller or the Target NBFC is unwilling. In both situations, the balance sheet of the Target NBFC would stand at null, after all of its assets and liabilities have been taken over by you, the Acquirer. RBI has provided a step-by-step procedure for buying NBFCs. If the deal is a friendly buying, then the first step which must be taken is to get the deal approved by the Board of Directors in a general meeting. Once the Board has consented to both the firms, an MOU with the Target NBFC has to be finalized & signed, to execute the acquisition. Generally, an MOU is signed and some advance money is paid to the seller, as a token. And then the rest of RBI’s requirements are to be met. Some precautions must necessarily be undertaken by the buyer to evaluate the worth of the seller. All matters about the field of “finance, legal, corporate and other”, must be reviewed and evaluated diligently.
When purchasing an NBFC, confirm that you do not require prior RBI approval to buy NBFC online in India for chosen. The Acquirer needs to apply for approval from the RBI in certain cases, before commencing the process. Some cases, however, do not require any such prior approval.
If the transaction to buy out the Target NBFC is similar to any of the above situations, then you need
to apply to RBI for prior approval. And your application, along with a cover letter on the letterhead of
the company, needs to be accompanied by the following documents :
Once you have the approval from RBI to buy the Target NBFC, a public notice is to be given in one leading national newspaper and one leading local newspaper, at least 30-days before this transaction (of transfer or purchase of shares, which is to take place).
Public notice is to be issued at least 30-days before the actual purchase of, or transfer of the ownership by sale of shares, or transfer of control (whether with or without the sale of shares) takes place. The publication needs to be done, by both the Acquirer Company as well as the Target NBFC. And also by all other parties concerned. They have to option to issue the notice together. After obtaining the prior permission of RBI. The proposal of transferring or selling ownership or control, the particulars of the Target NBFC, and the reasons for such transfer or sale of ownership or control, must be indicated clearly in the public notice. The notice shall be published in at least one leading national daily newspaper and at least one leading daily newspaper in the vernacular language of the place of registered office.
By buying an existing NBFC rather than getting a new one registered, you save on time. You can use this time to enhance the work of the previous entity. Though, both processes, of getting a new one registered or buying an existing one involve similar steps. Still, the preparation time is quite less if you buy an existing one. Or you may take an NBFC on rent. This prevents those problems that any new entity faces while setting up a business, making it known to the associates, etc.
NBFC sector, their transactions, any entry or exit into this sector is stringently regulated by RBI. All compliances of RBI must be duly fulfilled. Therefore, it is advised to take the help of skilled professionals who are in the know. Someone well aware of the processes, the requirements, and all provisions of RBI. And that skilled professional is what you shall get with “LegalRaasta”. We assure 100% assistance at every step of the journey. From fulfilling all RBI requirements, accounting, and reporting during the deal to meeting the RBI compliances afterward. All the processes are done in strict secrecy. We have listed NBFCs which are available for sale on our site, so you can choose according to your preference, goals, and budget. We also help with mergers, take-overs, and collaborations. We also make available NBFCs on rent in the area of your choice. The process with us would start with a detailed telephonic consultation. We ask a few questions. To enable us to get an insight into your requirements and goals and offer you the most suitable organization. Next, together, we go through all the compliances, legal requirements, forms to be filed, information/paperwork to be completed, as required by RBI. If you are intending to buy NBFC online in India, you can now sit back and concentrate on your business while "LegalRaasta" starts the process of compliances, examination, due diligence, creation of MoU, Share Transfer Agreements, etc. Of course, we’ll update you on every step we take.
During the purchase of an NBFC, the final step is to discharge the Share Purchase Agreement. This agreement is signed by both, the buyer and the seller, after the public notice of buying has been issued. The assets of the seller or the Target NBFC are discharged in the balance sheet and liabilities are paid off. So the Acquirer Company receives only a clean balance sheet. The amount is calculated on the basis of the net worth of the Target NBFC as of the date of the takeover. RBI has also provided directions that are to be followed while determining the net worth. This is the final step in the official handover of the management and the assets/liabilities from the Target Company to the Acquirer Company. In case any consideration is remaining, it shall be paid off within 31 days of the public notice in the newspaper, as per RBI. Or as mutually agreed by all the parties.
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