Registration under which act?

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

One of my friends is providing a small type of loan to individuals and shop keeper i.e. the amount involved from 25000/- to 500000/- against which he is taking negotiable instrument like promissory note / Cheque as security.

He needs to do this business legally. If any cheque's got bounced, he needs to initiate the complaint before the court by legally.

Where do we register? Even I have verified the Tamil Nadu money lenders act, wherein we can register only when the lending amount is only up to 10000/-.

If we register this company under companies act, it has to be register only under NBFC wherein we have to deposit minimum of ₹ 2 Crore investment required. My friend does not have that much money to register as NBFC.

Please help us, in this situation.

Thanks in Advance.

AI Summary

Exploring Legal Paths for Small Loan Business in India: Navigating Money Lenders Act & Negotiable Instruments Act Changes An individual is seeking advice on how to legally operate a small loan business in India, where loans range from 25,000 to 500,000, secured by promissory notes or cheques. They are concerned about the legal process for handling bounced cheques and have explored the Tamil Nadu Money Lenders Act, which only allows registration for loans up to 10,000. Registering as an NBFC under the Companies Act requires a 2 crore investment, which is not feasible for them. They seek guidance on legal registration options. A respondent notes upcoming changes to decriminalize certain aspects of the Negotiable Instruments Act.