Nidhi Company

Nidhi Company

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Nidhi Company registration including Incorporation kit and share certificates.

Nidhi Company

What is Nidhi Company and how does it work?

Nidhi companies fall under the category of non-bank finance companies. Registering Nidhi Company allows Nidhi to borrow from its members and lend to members. Nidhi companies registered in India are designed to develop a saving and savings practice among their members. Funds donated to Nidhi Company come from its members only.

To Install Nidhi Company, no license is required from the Bank of India. Therefore, the formation of Nidi Company is easy. Nidhi companies are registered as public companies and must have Nidhi Limited at the end of the name. It should also be noted that Nidhi Companies fall under the Reserve Bank of India as the operations of Nidhi Companies are similar to NBFCs.

How to Get Nidhi Company into India?

Installing Nidhi Company in India, at least seven compulsory members, of which three must be appointed directors. However, Nidhi Company must get at least 200 members within one year of its launch.

To register a Nidhi Company, you need to have a minimum equity budget of Rs. 5 lakh. However, it should be noted that the Residual Owner Funds (NOF) should be increased to Rs 10 lakhs within one year of registration. When registering as a Nidhi Company in India, you are required to first associate with a Limited Company under the Companies Act, 2013.

Although Nidi Company Registration, it is necessary to ensure that the purpose stated in the Memorandum of Association is to develop a saving and saving practice among members, receiving and lending to its members for their benefit.

To be posted as a Limited Company, Nidhi Company must meet the following capabilities:

  • Not have less than 200 shareholders (members)
  • Have a total amount of 10 lakh rupees or more
  • They have a deposit amount of less than 10% of the balance.
  • Have a deposit amount exceeding the deposit balance not exceeding 1:20.

Total managed funds?

The amount of equity paid and the free deposit is reduced by the accumulated loss of intangible assets from the last balance sheet. Suppose at the end of one year from the beginning, Nidhi Company cannot meet the above requirement. In such a case, the Company may apply to the Regional Director for Form NDH-2 for an extension within 30 days of the close of the first financial year.

Even after the second financial year, Nidhi Company cannot meet the needs of Nidhi Company. Nidhi Company should not accept any other deposit from the beginning of the second financial year until it complies with the Terms of Use as Nidhi Company.

What documents are required to register a Nidhi Company?

The following documents are required for join Nidhi Company.
  1. Directors’ ID number
  2. PAN number of shareholders and directors
  3. Proof of residence of shareholders and directors
  4. Pictures
  5. Identification documents like Aadhar card
  6. Lease agreement or lease agreement for a registered office
  7. If the office does not belong to you, the ownership information or address of the registered office must be provided
  8. NOC if required
  9. MOA
  10. AOA
  11. MCA form

How do you register a Nidhi Company?

One can get Nidi Company registration by following step 6.

Step 1: The first step begins with obtaining a Digital Signature Certificate for applicants; upon receipt of the DSC, the applicant must apply for the Director’s Identity Number.

Step 2: Next, the applicant must apply to the MCA for name approval. The names provided must be separate and should not conflict with any of the provisions relating to intellectual property rights.

Step 3: Once the application has been made, the applicant must submit the prescribed documents to the ROC. Documents must be completed on the INC 32 form, and together with the MOA and AOA must be submitted. The applicant must clearly state the main purpose of building the business while submitting the documents

Step 4: A certificate of support will be issued after reviewing the Installation Certificate. This certificate is issued by the registrar within 15 days.

Step 5: The next step is when Nidhi Company is required to apply for PAN and TAN.

Step 6: This is the final step in the merger of Nidhi Company. At this stage, you are required to open a bank account in the name of the business for any transaction.

What are the compliance submissions for the Nidhi Company submission?

After Nidhi Company registration is done, there is separate compliance that the applicant must be aware of

Form NDH 1

The list of members must be submitted within 90 days of the merger.

Form NDH 2

This will be included in the extension of the application to meet the target of 200 members.

Form NDH 3

You are required to complete the annual requirements to complete the NDH 1 form

The profit and loss statement and balance sheet must be submitted following the Company’s requirements annually. This is done in the form of AOC 4

Nidhi Company is required to file Income Tax Returns following the requirements of the Income Tax Act.

Nidhi Company must have Net Owned funds over Rs. 10 lakh. The ratio should be in the ratio of 1:20.

What Are The Benefits Of Getting Nidi Company Registration?

First, the installation of Nidhi Company Limited Capital is required. But it should be noted that it is necessary to start the installation as a limited Company.

The main purpose of this type of business is to raise funds from the community. This is also the type of NBFC that performs functions such as receiving deposits from members. Therefore, Nidhi Company can easily raise money.

Companies are registered under section 406 of the Companies Act 2013; this type of business is based on the principle of the same profit. The main beneficiaries are members of the business shareholders. Therefore, Nidhi Company easily provides loans to its members.

The applicant may select a group of members to execute the program. Once Nidhi Company is registered, there is no need to engage in any external management.

There is Less Compliance compared to other types of businesses. Under the RBI Act, Nidhi companies are free to do a different type of Compliance.

Under the Companies Act, this type of business will protect a limited credit situation. Also, this type of business is independent of members and directors.

Since Nidhi Companies are similar to NBFCs, they must comply with NBFC requirements, and businesses are free from certain provisions of RBI action.

Compared to credit unions regulated by the Public Registration Act, there is less Compliance with Nidhi companies. Therefore, when one wants to adhere to a few compliances, one can choose Nidhi Company.

Restrictions on Nidhi Company

Here are some of the limitations of Nidhi companies. As per Rule 6 of the Nidhi Laws, 2014, a Nidi Company should not:

  1. managing a Chit fund business, renting, renting, or obtaining securities issued by any corporate person.
  2. Withdraw popular shares, debts, or any other debt instrument in any name or form.
  3. Open a current account with its members.
  4. Acquire another Company by purchasing securities or controlling the formation of the Board of Directors of any other Company by any means or by any arrangement to change its management, unless it has made a special decision at a general meeting. And obtain the prior approval of the Regional Director who has jurisdiction over that Nidi Company.
  5. To carry on any business other than the business of borrowing or lending on its behalf: Provided that the Nidis, subject to all the provisions of these rules, may provide rental locks to its members subject to rental fees from such areas. Not more than 20% of the total Nidhi revenue at any time during the financial year.
  6. Receive deposits or lend to someone other than its members;
  7. holds any property attached to its members as security;
  8. Take deposits or borrow money from anyone in the company;
  9. Join in any partnership program on loan or loan activities;
  10. Withdrawal or trigger the removal of any ad by any form of deposit request
  11. Pay any brokerage or incentive to collect deposits from members either through the distribution or disbursement of loans.

AK Taxes has a team of experts including Chartered Accountants, Company Secretaries, Attorneys, and Financial Specialists.

We have helped thousands of businesses register different types of businesses and maintain Compliance with Post Incorporation.

Our business advisory team provides timely guidance and constant support, which will help your business grow.

Frequently Asked Questions

At least 3 directors and 7 shareholders are required to register a Nidhi company in India.

A director must be over 18 years of age and must be a natural person.

The address in India where the Company’s registered office will be located is required. The properties may be commercial/industrial/residential where communication from the MCA will be obtained.

No, you do not have to be in our office or come from any office to register a Nidhi Company.

Digital Signature finds out who the sender or signatory is online while filling out documents online. The Department of Business Affairs (MCA) authorizes Directors to sign additional application documents using their Digital Signature.


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