Chits Funds Company Registration
Legally Register & Operate Your Chit Fund Company with NR Filing
Incorporation of Chit Fund Company under Companies Act, 2013
A Chit Fund Company is a financial entity regulated under the Chit Funds Act, 1982, and must be incorporated under the Companies Act, 2013. At NR Filing, we provide end-to-end support — from incorporation to securing the Chit Fund License from the respective State Registrar of Chits.
A Chit Fund is a rotating savings and credit scheme, where members contribute to a common pool, and the pooled amount is offered to one member each cycle through auction or lottery. It offers both savings and borrowing advantages to participants.
NR Filing’s Chit Fund Registration Package Includes:
Service | Included |
Company Incorporation | ✅ |
Rule-12 Declaration Filing | ✅ |
MOA & AOA Drafting with Chit Clause | ✅ |
DIN, DSC, PAN, TAN | ✅ |
Chit License Application Filing | ✅ |
Chit Agreement & Bye-law Drafting | ✅ |
Security Deposit Assistance | ✅ |
Post-License ROC & Compliance Filings | ✅ |
Find answers to your questions
🔹 Step 1: Company Incorporation
- Type of Entity: Private Limited or Public Limited Company
- Recommended: Private Limited Company – easy to manage, scalable, and recognized in the industry
- Name Guidelines: Must include “Chit”, “Chit Fund”, “Chitty”, or “Kuri” as prefix or suffix
- Main Object Clause: Must state only chit fund business
- Minimum Capital: ₹1,00,000 (can be higher as per state)
📑 Documents Required:
- PAN, Aadhaar, Passport-size Photo of Directors
- Address Proof (Utility Bill / Bank Statement – within 2 months)
- Registered Office Address with NOC
- Email ID and Mobile Number
- Business Plan and Chit Model
🔹 Step 2: File Rule-12 Declaration
While reserving the company name via SPICe+ Part A, upload a Rule-12 Declaration, stating that prior approval from the Registrar of Chits will be obtained before starting chit business.
🔹 Step 3: Apply for Chit Fund License
- Obtain prior sanction under Section 4 of the Chit Funds Act, 1982 from the Registrar of Chits in the respective state
- Submit:
- Certificate of Incorporation, MOA & AOA
- Net Worth Certificate of directors
- Board Resolution
- Draft chit agreement and bye-laws
- Details of each chit: amount, members, duration
- Office setup and layout proof
🔹 Step 4: Deposit Security (Section 20)
Before starting any chit scheme, the foreman (company) must deposit 100% of the chit amount as security with the Registrar of Chits:
- Accepted Forms: Fixed Deposit (FD), Bank Guarantee, or Government Security
- Must be deposited in the State Bank of India in the name of the Registrar
🔹 Step 5: Obtain Chit Fund License
- Registrar verifies documents, conducts inspections, and evaluates financials
- Upon approval, license is issued
- Every chit must be individually registered before auction begins
No. Chit funds are regulated by the Chit Funds Act, 1982, not by RBI.
No. Chit funds are regulated by the Chit Funds Act, 1982, not by RBI.
NOF = Paid-up Capital + Free Reserves – Accumulated Losses – Deferred Expenditure – Intangibles
Yes. Registration is compulsory under Section 4.
₹1 lakh (as per Section 8), though some states may require ₹1 crore or more.
- ❌ RBI Approval is NOT required
- 🏛️ Governed by Chit Funds Act, 1982 and State-specific Rules
- 🏢 Must be registered as a Private or Public Limited Company
- 📄 Company name must include “Chit”, “Chit Fund”, “Chitty”, or “Kuri”
- ✅ Must obtain prior sanction under Section 4
- 💰 Deposit 100% chit value as security under Section 20
- 🧮 Maximum commission allowed to foreman: 5%
- ❌ No other business allowed apart from chit fund activity
- 🚫 Funds cannot be diverted to sister companies or other ventures
- 🗂️ Maintain records, submit chit agreements, and meeting minutes
- 🧾 File quarterly and annual returns to Registrar
- 🧮 Chit collection limits under Section 13:
Type of Entity | Maximum Allowed |
Individual | ₹25,000 |
Company | Up to 10× Net Owned Funds |
Net Owned Funds = Paid-up Capital + Free Reserves
Less: Accumulated Losses + Deferred Expenditure + Intangibles
- Register Private/Public Limited Company with chit fund object
- Include “Chit/Chitty/Chit Fund/Kuri” in the company name
- File Rule-12 declaration during name approval
- Draft MOA/AOA with only chit fund objectives
- Deposit minimum capital (₹1 lakh or more, depending on state)
- Obtain prior approval under Section 4 of the Chit Funds Act
- Deposit 100% security as per Section 20
- Register each chit individually with the Registrar
- Maintain records & file all required returns
A company can collect up to 10 times its Net Owned Funds.
No. Section 12 prohibits any other business except chit funds.
Yes. 10% of profits must be transferred to a reserve fund annually.
Yes. 100% of the chit value must be deposited before commencement.
No. The maximum allowed commission is 5%.
