A Complete Guide to Register Under Nidhi Company

Introduction

Nidhi Company is registered & regulated under Companies Act 2013 with the sole objective of cultivating the habit of saving amongst its members. Nidhi Company collects the fund in the form of a deposit from its members only, and it is allowed to lend the money to their members only.

Nidhi Company is one of the categories of NBFCs with minimal restrictions by RBI. Thus Nidhi only deals with their shareholder-members and is exempted from core provisions of RBI. Therefore due to such minimum restriction, these companies are an ideal structure of the company.

The Procedure for Registration of Nidhi Company, along with its compliance, is discussed henceforth.

Nidhi Company Registration Process

Following is brief steps are required to be followed to incorporate Nidhi Company:

•     Collect the necessary documents of directors & members who shall be scanned and self-attested.
• Procure the Digital Signature Certificate (DSC) of all the directors/members to sign the form digitally.
• Apply for name reservation through MCA online web service “RUN” (following the necessary guidelines explained hereinbelow). Name cannot be similar to that of any other company with the same name or trademark registered.
• Finally, incorporate the company after the name is approved through SPICe, a form that is downloaded online through MCA with necessary government fees & documents attached to the form along with AOA & MOA.
• PAN-TAN application gets included in Nidhi Company Registration through the same form. 

Documentation

Following are the documents to be annexed with the application for Nidhi Company Registration:

·         Anyone of the Identity proof of its directors & shareholders amongst Voter Id/Driving license/Passport.

·         A copy of the Aadhar card of all the directors & shareholder

·         Residential address proof such as electricity bill/mobile bill/bank statement of all its directors & shareholders.

·         Registered office address proof such as electricity bill in case the premise is owned and NOC from the landlord in case the premise is rented.

·         Copy of rent agreement

·         PAN of all its directors

·         Passport size photograph

Guidelines for Name Apply of Nidhi Company

Following factors shall be kept in mind while choosing the name of Nidhi Company:

·         The name shall be easy to remember & to pronounce

·         Shall not be too identical or similar to any other name or trademark already registered.

·         Nidhi company name must end with the word “Nidhi Limited.”

·         Name chosen shall not violate the provisions of any law, act or regulations.

Nidhi Company Online Registration

Nidhi companies are regulated under the Companies Act 2013 and are incorporated online through the MCA website. Nidhi Company registration process is easier and hustles free as compared to the NBFC Registration Process.

This form of NBFC specifies no minimum qualification requirement for directors or any other such similar criteria. Besides, unlike other NBFCs, Nidhi Company not requires any prior approval from RBI for its incorporation.

Key-Points for Starting Nidhi Company

Following are the key points you should know before incorporating a Nidhi Company in India:

·         Nidhi Company can be set up with a minimal fee & by following simple procedure through MCA with no prior approval of RBI needed.

·         No Nidhi company is allowed to perform activities of finance or microfinance business in India neither it can lend or borrow other than from its members.

·         After .1 year of incorporation, it shall increase its members to 200.

·         Nidhi Company grants a credit against security such as gold, FD, LIC, etc.

Pre & Post Registration Requirements

Following is the checklist of requirements for operating a Nidhi company before its registration & post registration:

Before incorporation:

·         Minimum 7 directors & 3 members are the compulsory requirements of Nidhi Company however directors & members can be the same person

·         Nidhi shall incorporate with a minimum capital of INR 5 Lakhs.

·         DIN & DSC of directors is a mandatory requirement before registration of Nidhi Company.

After incorporation:

·         Increase the number of members up to 200 after the expiry of one year from the date of its incorporation

·         Nidhi Company shall have net owned fund of INR 10 Lakhs.

·         Company shall keep the ratio above than 1:20 for the net owned fund to deposit ratio.

Wrapping-Up the Article

Nidhi Company is registered under the Companies Act 2013 and belongs to the sector of NBFC. However, RBI governs all the NBFCs, and Nidhi avails the enormous exception & advantage of being one of the types of NBFCs and still is not regulated or supervised through RBI & rather is governed through its separate rules of Nidhi Rules 2014.

For getting the Nidhi Company Registration Certificate & its complete compliance, contact us.