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Nidhi Company Registration

Exclusive Package

PAN CARD

ADHAAR CARD

NOC

Bank Statement of the Company 

Documents Required

Copy of PAN Card 

Passport size photograph  

Copy of Aadhaar Card/ Voter identity card

Copy of Rent agreement (If rented property)

Copy of Property papers(If owned property)

Landlord NOC (Format will be provided)

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  • Mon – Fri 7.00 – 09:00 pm
  • Saturday 8.00 – 08:00 pm
  • Sunday closed

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Assertively communicate multidisciplinary content through emerging skills for intermandated e-tailers. Rapidiously revolutionize emerging supply for interdependent portals. Monotonectally restore 24/365 leadership for high quality niche markets transform emerging mindshare...

Assertively communicate multidisciplinary content through emerging skills for intermandated e-tailers. Rapidiously revolutionize emerging supply for interdependent portals. Monotonectally restore 24/365 leadership for high quality niche markets transform emerging mindshare...

Assertively communicate multidisciplinary content through emerging skills for intermandated e-tailers. Rapidiously revolutionize emerging supply for interdependent portals. Monotonectally restore 24/365 leadership for high quality niche markets transform emerging mindshare...

Nidhi Company Registration

Nidhi Company Registration

Nidhi Companies play a crucial role in fostering thrift and savings habits among their members. These companies are designed to borrow from and lend to their members exclusively, with funds sourced solely from shareholders. While Nidhi Companies are relatively small compared to traditional banking institutions, they serve the primary purpose of cultivating savings within a community. For comprehensive insights into initiating a Nidhi Company in India, you can explore our article on “Starting a Nidhi Company” available in the Monitrix.in Learning Center. This article focuses on the intricacies of registering a Nidhi Company in India.

Overview of Nidhi Companies

Nidhi Companies are registered as Limited Companies engaged in accepting deposits and providing loans exclusively to their members. Although their activities are overseen by the Reserve Bank of India (RBI), akin to Non-Banking Financial Companies (NBFCs), Nidhi Companies are exempted from certain core provisions and regulations applicable to NBFCs. This exemption is granted by the RBI due to the exclusive use of shareholder-members’ funds by Nidhi Companies.

Restrictions on Nidhi Companies

 

Under the Nidhi Rules of 2014, Nidhi Companies are subject to specific restrictions. According to Rule 6 of the Nidhi Rules, 2014, a Nidhi Company must not:

  1. Engage in chit fund, hire purchase finance, leasing finance, insurance, or acquire securities issued by any body corporate.
  2. Issue preference shares, debentures, or any other debt instruments.
  3. Open current accounts with its members.
  4. Acquire another company or change its management without specific approvals.
  5. Engage in any business other than borrowing or lending, with certain exceptions.
  6. Accept deposits from or lend to non-members.
  7. Pledge assets lodged by its members as security.
  8. Take deposits from or lend money to any body corporate.
  9. Enter into partnership arrangements in borrowing or lending activities.
  10. Issue advertisements soliciting deposits.
  11. Pay brokerage or incentives for mobilizing deposits or deploying funds.

Nidhi Company Registration Process

To establish a Nidhi Company in India, the initial step involves incorporating a Limited Company under the Companies Act, 2013. This requires a minimum of three Directors and seven shareholders. During incorporation, it is crucial to specify in the Memorandum of Association that the company’s objective is to cultivate thrift and savings habits among members, accepting and lending deposits exclusively for mutual benefit.

Post incorporation, within one year, the Nidhi Company must meet the following criteria: • Have at least two hundred members (shareholders). • Possess Net Owned Funds (NOF) of ten lakh rupees or more. • Maintain unencumbered term deposits of at least ten percent of outstanding deposits. • Maintain a Net Owned Funds to deposits ratio not exceeding 1:20.

If these conditions are met, the Nidhi Company must file a return of statutory compliances in Form NDH-1, duly certified by a practicing CA/CS/CWA, along with the requisite fees within ninety days from the close of the first financial year.

In case the company fails to meet the requirements within the stipulated time, an application for an extension of time (Form NDH-2) can be submitted to the Regional Director within thirty days from the close of the first financial year.

Failure to meet the Nidhi Company requirements after the second financial year may result in the company being unable to accept further deposits until compliance is achieved, with potential penal consequences.

Nidhi Amendment Rules, 2020

A notable update in the Nidhi Rules occurred on 3rd February 2020, as per the Ministry of Corporate Affairs. Stakeholders are advised to use the revised forms, including Form No.NDH-1 (Return of Statutory Compliances), Form No.NDH-2 (Application for extension of time), and Form No.NDH-3 (Return of Nidhi Company for the half year ended). These revised forms align with the latest regulatory amendments for Nidhi Companies.”

"Check Business Name Availability with MCA in India

To initiate the registration process for a company in India, the first crucial step is obtaining name approval from the Ministry of Corporate Affairs (MCA). This approval typically takes 24-48 hours. For a private limited company in India, it’s essential that the name ends with the words ‘private limited.’ Similarly, a One Person Company should conclude with ‘(OPC) private limited,’ while Limited Liability Partnerships (LLP) should end with LLP. Section 8 companies can include words such as foundation, association, or institution in their names.

It is imperative that a proposed company name is not identical or similar to an existing company name. Additionally, each company name must incorporate a term denoting the business activity. For example, in ‘VERVE Financial Services Private Limited,’ the term ‘Financial Services’ indicates the nature of the business.

Proprietorship vs Limited Liability Partnership (LLP) vs Company

Features Proprietorship Partnership LLP Company Definition Unregistered type of business entity managed by one single person A formal agreement between two or more parties to manage and operate a business A hybrid combination with features of a partnership firm and liabilities of a company. Registered entity with limited liability to owners and shareholders Ownership • Sole Ownership • Min 2 Partners • Max 50 Partners • Designated Partners • Min 2 Directors • Min 2 Shareholders • Max 15 Directors • Max 200 Shareholders

For One Person Company • 1 Director • 1 Nominee Director Registration Time 7-9 working days Promoter Liability Unlimited Liability Limited Liability Documentation • MSME • GST Registration • Partnership Deed • LLP Deed • Incorporation Certificate • MOA • AOA • Incorporation Certificate Governance – Under Partnership Act LLP Act, 2008 Under Companies Act, 2013 Transferability Non-Transferable Transferable if registered under ROF Transferable Compliance Requirements • Income tax filing if turnover is more than Rs.2.5 lakhs • ITR 5 • Form 11 • Form 8 • ITR 5 • ITR 6 • MCA filing • Auditor’s appointment

Know More

Nidhi Company FAQ’s

How many people are required to register a Nidhi Company? A minimum of 3 directors and 7 shareholders are required to register a Nidhi company in India.

What are the requirements to be a Director? The Director needs to be over 18 years of age and must be a natural person.

Is an office required to start a Nidhi Company? Yes, an address in India where the registered office of the Company will be situated is required. The premises can be commercial/industrial/residential where communication from the MCA will be received.

Do I have to be present in-person to incorporate a Nidhi Company? No, you don’t have to be present at our office or appear at any office for the registration of a Nidhi Company.

What is a Digital Signature Certificate? A Digital Signature establishes the identity of the sender or signee electronically while filing documents through the Internet. The Ministry of Corporate Affairs (MCA) mandates that the Directors sign some of the application documents using their Digital Signature.

What are the documents required for Nidhi Company registration? Identity proof and address proof are mandatory for all the proposed Directors of the Nidhi Company. PAN Card is mandatory for Indian Nationals. In addition, the landlord of the registered office premises must provide a No Objection Certificate for having the registered office in his/her premises and must submit his/her identity proof and address proof.

Key points

Registering a Nidhi Company in India involves several key steps. Here are the key points you should consider for the registration of a Nidhi Company:

Minimum Requirements:

  • Minimum of 7 members (individuals)
  • Minimum 3 directors (individuals)

Name Approval:

  • Choose a unique and suitable name for the Nidhi Company.
  • Check the availability of the chosen name through the MCA portal.

Incorporate the Company:

  • Prepare the Memorandum of Association (MOA) and Articles of Association (AOA).
  • File the incorporation documents with the Registrar of Companies (RoC).

Capital Requirement:

Minimum paid-up equity share capital of Rs. 5 lakhs

Object Clause:

  • Clearly define the objectives and activities of the Nidhi Company in the MOA.

Directorship:

  • Ensure a minimum of three directors, and they should have a Director Identification Number (DIN).

Registered Officer:

  • Have a registered office for the Nidhi Company within 30 days of incorporation.
  • Provide necessary documents, such as rental agreement or sale deed, as proof of the registered office.

Application for Nidhi Status:

  • File an application with the Regional Director to declare the company as a Nidhi Company.

Compliance with Nidhi Rules:

Ensure compliance with the rules specified under the Nidhi Rules, 2014.

Nidhi Company Declaration:

Submit a declaration by the directors that the company will comply with Nidhi rules and regulations.

Minimum Number of Members:

  • Maintain a minimum of 200 members within one year of incorporation.

Maintenance of Registers:

  • Maintain various statutory registers and records as required by the Nidhi Rules.

Annual Compliance:

  • Comply with annual filing requirements, such as filing annual returns and financial statements with the Registrar of Companies.
 
 It’s crucial to consult with a professional or legal advisor familiar with the latest regulations to ensure accurate and timely compliance with all the requirements for Nidhi Company registration.