25
May

How To Start Asset Management Company in India

What is an Asset Management Company?

An Asset Management Company is a business entity that regulates various mutual fund opportunities in which potential investors can invest and benefit from the share returns. They allocate funds in a way that provides a framework for the schemes of investment. Setting up an Asset Management is a great option if you’re seeking the opportunity to setup firm in India.

 

Documents required to establish an Asset Management company:

No matter in what business category you’re setting up your company in, you always require documents to get verified. In this case, make sure you have the following documents ready for initiating the process:

  1. If you are starting as a private limited, you need to provide a Memorandum of Association and Articles of Association. Along with that, you also need to submit your strategy of investment.
  2. The director of the company needs to get a DIN (Directors Identification Number) approved.
  3. Proof of Identity (Aadhar card/Pan card/Passport)
  4. Proof of Address (latest bank statement/electricity bill)
  5. KYC documents

 

Things to know before applying:

  1. You need to pay a sum of Rs. 1 Lakh INR to the SEBI and Rs. 10,000 as the registration fee.
  2. There must be enough space in your procession to establish an office.
  3. Your net worth must at least be Rs. 50 Lakh INR per annum.
  4. The application is valid for up to 3 years.
  5. 2 of your board members must have experience of a minimum of 5 years.
  6. Your chartered accountant or monetary manager must have relevant academic qualifications from a professional university.

What’s the Incorporation Procedure?

  1. The Securities and Exchange Board of India overlooks the registration process of Asset Management companies.
  2. Apply through the form stated under Schedule 1 of SEBI.
  3. Mention the complete list of board members including directors, shareholders, investors, and foreign traders along with their proof of identity.
  4. Mention the monetary penalties and liabilities if any.
  5. list of sponsors and their verified documents.
  6. Submit the declaration of abiding by Regulation 7(d) of the Securities and Exchange Board of India.
  7. Provide a list of any disciplinary actions taken by the RBI against your company.
  8. If asked, submit an official approval from the Reserve Bank of India.
  9. You also need to attach a copy of a rough layout of your business plan or strategic models that you wish to incorporate in your business. This is important to make the purpose of establishing an asset management company meaningful.