Establishing a microfinance institution or a non-profit organization in West Bengal requires a clear understanding of the legal structure, compliance requirements and registration process. Entrepreneurs, social workers and financial service providers often look for the best and most secure structure to begin their journey. Two of the most effective formats are Microfinance Company Registration in West Bengal and Section 8 Company Registration in West Bengal.

Both structures serve different purposes but are widely used across the state to run sustainable financial and social welfare initiatives. In this blog, we will explore the benefits, registration steps and key differences to help you choose the right option for your mission.

A Microfinance Company provides small loans, credit support and financial assistance to underserved groups such as low-income individuals, women, self-help groups and rural communities. These institutions play a crucial role in supporting livelihood, entrepreneurship and economic development in West Bengal.

There are two common ways to start a Microfinance Company in West Bengal :

1. NBFC-MFI (Non-Banking Financial Company – Microfinance Institution) – regulated by RBI

2. Section 8 Company with Microfinance Activities – regulated under MCA

Because NBFC-MFI registration requires high capital (₹5 crore minimum), many startups and social organizations prefer the Section 8 structure for microfinance activities.

Provides affordable financial services to underserved communities

Boosts local entrepreneurship and employment

Helps promote financial inclusion across districts of West Bengal

Enhances trust among borrowers due to legal structure

Can access government schemes or CSR funding (in case of Section 8 format)

A Section 8 Company is a non-profit legal entity established for charitable, social, educational, or financial empowerment purposes. It is a preferred option for organizations that aim to provide microfinance support without the heavy compliance burden of RBI-regulated NBFCs.

Section 8 companies are registered under the Companies Act, 2013 and supervised by the Ministry of Corporate Affairs (MCA). These companies do not distribute profits to members but reinvest them for social welfare activities.

Ideal for NGOs, NPOs, SHGs and social welfare organizations

Low compliance compared to NBFC-MFI

Eligible for 12A & 80G tax exemptions

Can receive CSR funds, government grants and donations

Suitable for microfinance, charity-based lending and empowerment projects

If your goal is to lend professionally with commercial viability, a Microfinance Company is ideal. If your focus is on social empowerment without profit distribution, a Section 8 Company is the best fit.

1. Apply for Digital Signature Certificate (DSC)

2. File Director Identification Number (DIN)

3. Choose and reserve the company name

4. Draft MOA & AOA

5. File incorporation forms with MCA

6. For NBFC-MFI: Apply to RBI for registration & approval

7. Begin microfinance operations after approval

1. Obtain DSC & DIN for directors

2. Apply for name reservation

3. File Form INC-12 with objectives and required documents

4. Receive Section 8 License

5. Submit incorporation forms to MCA

6. Obtain Certificate of Incorporation

Webbsky Technology offers end-to-end support for Microfinance Company Registration in West Bengal and Section 8 Company Registration in West Bengal, ensuring a smooth and compliant process. From documentation and legal drafting to MCA filings and post-registration support, Webbsky makes the journey hassle-free for entrepreneurs and NGOs.

With expertise in financial and non-profit registrations, Webbsky Technology stands as a trusted partner for those looking to create meaningful impact in West Bengal.

Whether you aim to empower small businesses, support rural development or build a sustainable social enterprise, choosing the right legal structure is the first step toward success. Let your vision take shape with guidance from experts and begin your journey toward financial inclusion and community development.