A Nidhi company registration is a type of Non-Banking Financial Company(NBFC) incorporated and registered under Section 406 of the Companies Act 2013. The main aim of such a type of this form of company registration is borrowing and lending money to its core members. It is governed by Central Government and inculcated the habit of saving among its members and works on the principle of mutual benefit. All the lending and borrowing must comply with the rules laid down in Chapter
XXIV of Company Rules 2014. It doesn’t require to receive a license from the RBI and therefore easy to form. Examples of Nidhi Company registration are a mutual benefit company, mutual benefit funds, permanent funds, etc. Since Nidhi Company comes under one class of NBFCs, RBI is empowered to issue directions to them in matters relating to their deposit acceptance activities. However, after considering the fact that these companies deal with their members only. RBI has exempted the notified Nidhi from the core provisions of the RBI Act & other directions applicable to NBFCs.
At Patron Accounting we are continuously available to help you understand how to register as a Nidhi Company. It takes 7-12 days on an average to complete the registration process of the Nidhi Company, subject to the government processing time and the client document submission.
Nidhi Company by its nature of activity come under the category of NBFC but it does not require RBI’s approval. RBI has exempted Nidhi Companies from following stringent compliances so you don’t need to be worried about the regulations that need to be followed. The registration of Nidhi Company is very economical for the applicant. Since the minimum capital requirement for registration of Nidhi Company is Rs. 5,00,000 where you get the opportunity to invest the capital within the 2 months after the registration.
It is already clear that Nidhi company can accept deposits and give loans to its members only which means that the risk of non-repayment of loans is very less as compared to other finance businesses. It is the safest route of lending money and the loans given to members are at very fewer rates than others which brings greater savings amongst members.
Net owned funds mean the amount of capital invested by the owner in its business for raising funds. The net owned fund ratio of Nidhi Company is 1:20, which means you invest one rupee and can raise a deposit of twenty rupees.
A Nidhi Company encourages all its members to save money and encourages an economical lifestyle. A Nidhi Company is a mutual benefit company wherein members can lend or borrow money and accept financial aid amongst them.
✔ Minimum 7 shareholders
✔ Minimum Rs. 5 lakh share capital
✔ Minimum 3 Directors
✔DIN of all Directors
✔Free debt deposit of not less than 10% of the outstanding deposits.
✔ DSC (Digital Signature Certificate) for director
The very first step for registration is to obtain Digital Signature Certificate (DSC) which is used to sign the documents digitally. Directors PIN issued by the Ministry of Corporate Affairs (MCA) This step can be skipped, if Director already has this.
Now, you need to suggest three different names to the Ministry of Corporate Affairs for Nidhi Company. Out of three names, only one can be selected by the MCA. the name that is suggested should be unique and should not be similar to the names of any existing firm.
After getting approval for the name, you need to prepare a Memorandum of Association (MOA) and Articles of Association (AOA). the MOA and AOA are filed to the MCA including the subscription statement for the proposed Nidhi company registration.
It generally takes 7-12 business days to form a Nidhi Company and to get the Incorporation Certificate. Incorporation Certificate is a legal document that certifies that the company has been created and it contains the Company Identification Number (CIN).
The final step is to apply for TAN and PAN and open a bank account. PAN and TAN will be received within 7 working days. For opening a bank account you have to submit an Incorporation certificate, MOA, AOA, and PAN with the bank.
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Yes, while framing the rules and regulations of the Nidhi company, the Central Government of India has taken care of the security aspect of the depositors, and Nidhi company must strictly abide by the rules framed by the government. Contact us Now.
Only members of the Nidhi Company who has a membership ID can invest in the scheme.
The Nidhi Company uses the funds in lending the members as per the rules and regulations set by the Central Government. The lending is in the shape of small loans for business or microfinance.
Yes, another company can also be a shareholder in the Nidhi company.
No, as per the constraints mentioned in the Nidhi Company’s rules and regulations, no Nidhi Company is allowed to do the business of asset finance company.
A Nidhi Company can open 3 branches in its district only if it has earned profits after tax consistently during the preceding three financial years. For any other additional branch, it has to first take permission from the Regional Director.
No, it can be opened at a residential address also. There is no legal requirement to have a commercial place to open a Nidhi Company.