Nidhi Company Registration
Ideal for lending and borrowing amongst members
Starting At Rs. 19,999 Onwards
(Takes 30-40 days)
Nidhi Registration Online
Nidhi Registration Online
- Passport Sized photographs of all the directors.
- ID proof of all the designated directors and shareholders. (PAN card and Passport are valid).
- Address proof of all the directors and members (Ration Card, Aadhaar Card, Passport, Voter ID, and Utility Bill – electricity/water/mobile).
- Address Proof of the Company. Make sure that the address proof is not older than 2 months.
- Copy of the Property papers (if the property is owned).
- NOC (No-Objection-Certificate) from the owner (if the property is rented).
Benefits of Starting a Nidhi Company
The main objective behind building up a Nidhi Company is to urge its members to save so that they can easily meet their monetary requisites emerging from time to time. By being thrifty they become independent and would meet any future expense. And the advantage of getting a company enlisted as Nidhi doesn’t end here.
There are many favourable benefits of forming a Nidhi Company. Some are listed below:
- Liability is Limited: The liability of Directors and investors of a Nidhi Company is limited. The individual resources of any of the Directors or members are not in danger of being seized by banks, creditors, and government.
- Fewer Regulations: Nidhi organizations are administered under the Nidhi Rules, 2014. The Central Government is the directing power, and it only controls it’s exercising and working. Not many Rules are enforced by the RBI on a Nidhi company.
- Better Credibility: Nidhi companies offer better credibility instead of some other member-based associations like “Trusts, Cooperative Societies, or NGOs.”
- Better Option for Savings: The main purpose of a Nidhi Company’s incorporation is to encourage the habit of saving among the members (shareholders) of the Company. This is how it achieves the other goal of being mutually beneficial. The Nidhi Companies are allowed to lend and borrow money from it’s members (shareholders) only.
- Easy Access of Public Funds: The loans from the Nidhi Company comes at a less expensive rate than advances from banks and other NBFCs.
- Micro Banking: Nidhi companies give banking services to the remote and rural public of India, who are still located in far-off lands.
- Better Credit Co-operative Society: A Nidhi Company is a nearby substitute for a credit co-employable society. Furthermore, it is increasingly favored by the small financers. When a Nidhi organization has been enlisted, the members can profit from a considerable number of advantages of credit co-operative society.
- Simple Processing: Borrowing and lending to known people is substantially less confusing than managing banks, where the method is generic and fixed.
- Easy Registration Process: The procedure to enroll a Nidhi Company with LegalRaahi is very easy and transparent. You don’t have to take any permits from RBI. You simply need to incorporate your organization as an open constrained, with the MCA.
- Single Regulatory Body: After the Amendment in Companies act 2013, Nidhi Companies are supervised by the Nidhi Company Rules, 2014.
- Low Capital Requirement: Ministry of Corporate Affairs (MCA) orders that the base capital requisite is Rs.5 lakhs for a Nidhi company. And, within 1-year, the capital has to be raised to be at least Rs.10 lakhs. The “Fees, DIN, DSC & Other Expenses” are approximately Rs.25-30,000. These include Government fees that, differ from State to State.
- Fulfilling the needs of Lower & Middle-income groups: Nidhi Companies assume a significant job in addressing the needs of lower and middle-income groups by giving them money related assistance without complex formalities and documentation.
- Easier Eligible: People getting minimum wages and belonging to lower strata are usually unable to take loans from traditional banks because of their high eligibility criteria. For them, a Nidhi Company is a good option to obtain finance because of the fewer conditions.
- No External Involvement: Nidhi Companies take assets from their members and further gives credit to it’s members. In this way, no outer variables are influencing the work of these organizations. The financial members themselves direct the tasks of the organization.
- Separate Entity: A Nidhi Company is a separate legal entity that can acquire assets and incur debts in it’s own name.
What is included in Our Nidhi Company Registration Package
DIN for 3 Directors
Digital Signature For 3 Directors
Name search & approval
Company Pan Card
Procedure for Nidhi Company Registration
Furthermore, LegalRaahi is a specialist in Nidhi Company Incorporations, with more than 7 years of involvement in the field and effectively enlisting more than 500 Nidhi Companies. Our operations are spread all over India.
Step 1: Applying for DIN and DSC
DIN is given by the MCA and DSC is a digital signature used for an all e-filing process. This progression can be skipped for the Directors who have both DIN and DSC.
Step 2: Name Approval
Step 3: MoA & AoA
The “MoA and AoA” are to be filed with the ROC (Registrar of Companies) along with a subscription statement.
Step 4: Certificate of Incorporation (CIN)
Step 5: PAN, TAN and Bank Account
Restrictions on Nidhi Company
Despite the fact that the sole motive behind a Nidhi company, is taking up non-banking financial activities, they are prohibited to perform those transactions that may involve external factors, such as:
- Publicize themselves to encourage deposits,
- Chit funds,
- Leasing Finance,
- Hire-Purchase finances,
- Sell, mortgage, or pledge the advantage kept with it as security for a loan,
- Getting into a partnership for completing lending and borrowing activities,
- Taking deposits or lending funds to somebody other than its investors,
- Issue inclination offers, debentures, or some other obligation instruments,
- Issue equity shares of the nominal estimations of over Rs. 10/- each,
- Provide its shareholder’s value shares surpassing 10 or shares of the value of more than Rs. 100/-,
- Open a present record with its individuals (though it is allowed to open a Savings Account),
- Loan to or take a store from a corporate,
- Pay commission, fee or incentive for mobilizing deposits,
- Carry on any other business than borrowing and lending to its members,
- Hire a Purchase Financer,
- Pay any brokerage for granting a loan to its individuals.
Requirements for a Nidhi Company Incorporation
Given below are the essential conditions that must be met for registering or operating as a Nidhi Company.
Requirement before Registration
- Minimum number of shareholders or members – 7
- Minimum number of Directors -3
- The minimum capital requirement is of Rs. 5 lakhs
- DIN for Directors
- Minimum 3 Directors.
- No Preference Shares shall be issued.
- The objective of the company shall be cultivating the habit of saving by receiving deposits from and lending to its members only for their mutual benefits.
Requirement after Registration
- By the end of the 1st year, the number of members or shareholders of the Nidhi Company must be 200 at least.
- NOF should be more than Rs. 10 lakhs.
- The ratio for NOF to Deposit should be more than 1:20.
- Unencumbered deposits should exceed 10 % of outstanding deposits.
Compliances for Nidhi Company
- NDH-1 Form: A Nidhi Company has to submit the list of members within 90 days at the end of every financial year, in this Form.
- NDH-2 Form: It can request the MCA for an extension in this Form, in case it has not been able to add 200 members in it’s a first financial year.
- NDH-3 Form: Other than the above NDH-1 Form, a half-yearly return is also required to be filled in this Form.
- Annual Returns with ROC: A Nidhi Company has to file it’s Annual Returns with MCA through Form “MGT-7.”
- Profit & Loss Statement and Balance sheet: The financial statements and other related documents are to be submitted, annually, in Form “AOC-4.”
- Income Tax Returns: Nidhi Company, similar to every different business, must document its Annual Income Tax Returns by 30th September of the accompanying monetary year.
Deposits & Loans
Here we understand the regulations governing the loan and deposit under Nidhi Company.
Deposits under Nidhi Company
- There are 3 types of deposits, which a Nidhi company can accept. These are “Savings Deposit, Fixed Deposit (FD), and Recurring Deposit.”
- Nidhi can pay a maximum interest of up to 12.5% on FD & RD and 6% on a savings account.
- Nidhi can deposit up to 20 times the funds invested.
Loans from Nidhi Company
- 3 types of securities can be accepted for loans on offer by Nidhi Companies. Loans can be provided against “Gold, Property, Others (LIC, FD, etc.).”
- A Nidhi Company cannot engage in the business of microfinance but can lend it up to 20% interest against security.
- It can take legal action if a member fails to repay any sum of money.