Registration

Special Entity

Nidhi Company

Get Started!

Definition

Nidhi Company is a company registered under the Companies Act, 2013, which has a sole objective of cultivating the habit of thrift and savings amongst its members. Nidhi companies are allowed to take deposit from its members and lend to its members only. Therefore, the funds contributed for a Nidhi company are only from its members (shareholders) and used only by the shareholders of the Nidhi Company.



Benefits of Registration:

  • Better Option than Credit Co-operative - Nidhi company is most preferred by the small financer as this is a close substitute of credit co-operative society After you register Nidhi company you have all other benefits of credit co-operative society as well double deposit advantages.
  • Easy Access of Public fund - The members of the Nidhi company can borrow money at a cheaper rate from its own Company as compared to the borrowings from banks and other NBFCs. Moreover, they have access to quick lending procedures and customized services.
  • Better Saving Option - One of the objectives of Nidhi company registration is to encourage saving among the members of the Company and thus to achieve the goal of mutual benefit. The Nidhi Companies lend and borrow money to and from its members only.
  • Easy processing - Borrowing and lending to known persons i.e., its members, where the procedure is fixe is much less complicated than dealing with banks. A Nidhi Company registration allows its members to expose the potential of their money and gain a lower interest rate when they need to cash themselves.
  • Limited Regulations - Nidhi companies follow the Nidhi Rules, 2014 issued by the Central Government in respect of its activities and working. Regulations imposed on Nidhi by Reserve Bank of India is limited.
  • Low Capital Requirement - of Corporate Affairs mandates the minimum capital requirement of INR 5 Lakhs for Nidhi. However, within one year, the capital shall be increased to at least INR10 lacs. Easy Registration Process

Minimum Legal requirement For Nidhi Company:

Every Nidhi company is expected to meet the below compliance requirement as per Nidhi company Rule 2014.

  1. Minimum 200 members (within one year)
  2. Net owned fund of Rs. 10,00,000 (within 1 year)
  3. Net owned fund of Rs. 10,00,000 (within 1 year )
  4. Compulsorily filing of Annual Accounts, Audit, and Tax returns.
  5. The ratio of net owned funds to the deposit must not be more than 1:20.

Ten Restricted Business Activities for a Nidhi Company:

  1. Carry on or take up a business of chit fund
  2. Hire purchase finance, leasing finance, insurance or acquisition of securities by a body corporate.
  3. Open any current account with its member ( Can Open Saving Bank Account )
  4. Accept deposits from or lend money to any person other than its members.
  5. Pledging of any assets in the form of security provided by its members.
  6. Accept deposits from or lend money to any Body corporate.
  7. Enter into any kind of partnership arrangement in its borrowing or lending events.
  8. Publish any advertisement for any form of deposit etc.
  9. All Nidhi shall issue equity shares of the nominal value of not less than Rs. 10/- each
  10. Each Nidhi shall provide to all its deposit holders a minimum of 10 equity shares at least or shares equal to the value of INR100/-

Procedure and Steps Taken for Register a Nidhi Company:

  • Step 1 - Application DSC (Digital Signature Certificate)
  • Step 2 - Search for the Company Name availability.
  • Step 3 - Application for the Name availability.
  • Step 4 - Drafting of Memorandum of Association (MOA) & Articles of Association (AOA).
  • Step 5 - Filing of e-forms with RoC (Registrar of Companies).
  • Step 6 - Payment of RoC Fees & Stamp Duty.
  • Step 7 - Verification of documents / forms by RoC
  • Step 8 - Issue of Certificate of Incorporation by RoC

The following documents must be submitted in order to get a company registered as a Nidhi Company:

  1. Ownership documents or a rent/lease agreement has to be provided as a proof of address of the registered place of business
  2. No Objection Certificate (NOC) duly signed by the landlord or the owner of the place where the business is registered
  3. Identity proofs
  4. Address proofs of the members of the company
  5. Photographs of the members of the company
  6. Digital Signature Certificate (DSC) of the company
  7. Copies of PAN cards of the members
  8. Certified copy of the updated Memorandum of Association (MoA) of the company
  9. Certified copy of the updated Articles of Association (AoA) of the company