Nidhi Company Registration
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Nidhi Company is a sort of Non-Banking Financial Company (NBFC) that does not need any Reserve Bank of India (RBI) license. Nidhi Companies are limited companies established for developing the habit of economy and savings amongst its members. It borrows and lends from members only. The main reason why the Nidhi Company is so popular among the business communities is that Nidhi Company is very simple and cheap to register.
Nidhi Companies mostly work in the southern part of India. Besides, it should have “Nidhi Limited” as the last words of its name.
You can Apply for Nidhi company registration online through MeraLegal and get Nidhi company license in 15-20 working days. Nidhi company is considered as a suitable replacement for credit co-operative society and is easy to run with fewer compliances.
Some of the advantages of forming a Nidhi Company in India are as follows:
Borrowing and lending to known persons, where the procedure is fixed, is much less difficult than dealing with banks or in an informal environment. A Nidhi Company allows its members to access the value of their money and achieve lower interest rates when they need money themselves.
Regulator of Nidhi Companies
Nidhi Company is a part of the Non-banking financial sector. According to the Companies Act,2013, NBFCs are governed and registered by the Reserve Bank of India. However, in this scenario, Nidhi Company is an exception. It has a different regulating rule by the name of Nidhi Rules,2014. Registration of Nidhi Company is done under Section 406 of the Companies Act,2013. RBI has excluded Nidhi Company Registration and operation from its key requirements as it deals with the members and shareholders. However, RBI maintains its rights to issue regulations for matters relating to the deposit-taking activities of Nidhi Companies.
Prohibition of specific activities in a Nidhi Company
The Nidhi Companies have to follow specific restrictions that are enforced on them in terms of their operations. Following are certain under which Nidhi Company cannot deal, accept deposits and lend funds
- Chit Funds
- Insurance company
- Hire-purchase finance
- Securities Business
- Leasing of finance
- Cannot Furnish funds to any other person except members.
- Non-acceptance of deposits from any other person except members.
Before beginning the procedure of Nidhi Company Registration, the following checklist must be taken care of:
The object of the Nidhi Company
The primary and only objective for which a Nidhi Company must be formed should be "developing the habit of saving and thrift among its members, taking deposits from, and lending to, its members only, for their mutual benefit."
Process of a Nidhi Company Registration
Though the registration process of a Nidhi Company is easy, still help from a professional is advised to complete the several complicated forms and submit them within time. Moreover, the government websites and language are a bit on the rough side, too.
MeraLegal is an expert in Nidhi Company Incorporations, with the experience of over 8 years in the field and has registered more than 500 Nidhi Companies successfully. Our services are distributed all over India.
Step 5: Receiving Certificate of an incorporation and opening Bank Account
After approval of incorporation documents, you will get your Certificate of Incorporation, including your Company Identification Number (CIN) as well as PAN and TAN of your company. After this, you can open a bank account on the name of your company and can start your business.
Documents Required For Nidhi Company
In India, Nidhi company registration is done with proper identity and address proof. Identity and address proof will be necessary for all the directors and the shareholders of the company to be registered. Documents that are approved by MCA for the online Nidhi company registration process are as follows:
Identity and address proof of directors and shareholders
- Scanned copy of PAN(Passport in case of Foreign Nationals & NRIs)
- Scanned copy of Voter’s ID/Driver’s License/Passport(anyone)
- Scanned copy of telephone or mobile bill/latest bank statement/electricity or gas bill of the individual(Anyone, not older than two months)
Please note that for the foreigners & NRIs, a certified or notarized copy of the passport has to be submitted compulsorily. All documents submitted should be valid and authentic.
Registered Office Proof
For online company registration in India, the company needs a registered office in India. Documents that need to be compulsorily provided while giving Registered Office details are as follows:
- Scanned copy of the telephone or mobile bill/latest bank statement/gas or electricity bill in case you own property
- Scanned copy of Notarized rental agreement
- Scanned copy of No-objection certificate from the property owner
Note: Your registered office can be a commercial space or can be your residence too.
How can we assist in getting registration?
Our services include the following:
- Guaranteed Name approval from the Ministry of Corporate Affairs (MCA)
- TAN and PAN
- Trusted by more than 4,00,000 customers
- Filling of company incorporation e-forms with the MCA
- DSC and DIN for subscribers and directors
- Business plan guidance
- Drafting objective, Article of Association (AOA), and Memorandum of Association (MOA)
- Corporate drafts set, legal agreement, letters on requirement basis.
Compliances After Nidhi Company Registration
After successfully registering the Nidhi Company, make sure that you follow with these conditions to avoid cancellation of your registration or fines. To know the post compliances naturally related to Nidhi Companies, the following table will help you:
Income Tax Return
Needs to be submitted by 30th September
Frequently Asked Questions ?
Nidhi Companies are limited companies created for developing the habit of savings and savings amongst its members, borrowing and lending deposits from members only, for their mutual benefit.
Nidhi Companies are formed as a public limited company where at least seven shareholders, a minimum of 3 Directors, are necessary for establishing a Limited Company. The minimum capital necessary is 5 lakh.
At least seven shareholders are needed to register a Nidhi Limited Company, and it will be a minimum of 200 within one year of incorporation.
Alike any other Public Company, Nidhi Company also needs at least 3 directors to register itself.
To start a Nidhi Company, a minimum Rs. 5,00,000 (5 lakhs) of capital is needed.
The amount of deposits depends upon the net owned capital of the Nidhi Company. According to the law, it has to maintain a ratio of 1:20, which implies if we have a net owned fund (NOF) of Rs. 100/-, we can take the deposit of Rs 2,000/-
A Nidhi Company is not permitted to open any of its branches before 3 years. Also, after 3 years, it can open its branches on a condition that profit has been earned by the Nidhi Company in all the three years continuously.
The main business of Nidhi Company is lending and borrowing money among its members.
- Gold, silver jewelry, and immovable property can be taken. But, it shall be considered as security when the time of repayment is less than one year.
- National Savings Certificates, Fixed deposit receipts, and other insurance policies and Government securities.
- Immovable property can also be used. But, the loan should not cross 50% of the value of the property given as security and repayment time should not exceed 7 years.
Nidhi Rules, 2014, manage Nidhi Companies. Such rules were implemented by the Central Government and included the regulatory policies for Nidhi company operations.
Any person who is above 18 years can become its member
The process of registration of a Nidhi Company can take up to 15 days.
No, a corporate body will not be allowed as a member of a Nidhi Company.
Yes, the Nidhi Company director can be a salaried person.
A Nidhi Company cannot work with hire-purchase funds, chit funds, insurance business, securities business, and leasing of finances.
These fees depend upon many factors and vary from case to case. MeraLegal offers the best price in the market. Please contact our expert to know the details.