Nidhi Company Registration

Ideal for lending and borrowing amongst members

Starting At Rs. 19,999 Onwards

(Takes 30-40 days)

Nidhi Registration Online

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About Nidhi Company

The feature that separates Nidhi Company from other different organizations/NBFCs etc. is that Nidhi manages with deposits from and loans to its individuals (shareholders) only, and works for the mutual benefits of its members. Accordingly, certain exemptions have been provided to these companies in respect of annual compliances and tax assessment.

Nidhi Companies in India are formed, administered, and controlled by Section 406 of the new Indian Companies Act of 2013, the Companies (Nidhi Companies) Rules of 2014, and the Chapter XXVI of the Companies Rules, 2014

The goal of consolidating a Nidhi Company is to energize investment funds just as thriftiness among its individuals. To satisfy this goal of developing the propensity for sparing and frugality among its individuals. Nidhi companies are permitted to take a deposit from and lend to the individuals as it were. At the end of the day, the assets added to a Nidhi company come distinctly from its individuals (investors) and are to be utilized uniquely by the investors of the Nidhi Company.

The name “Nidhi” in Nidhi Company signifies “treasure” and it begins from the Hindi vocabulary.

Nidhi Company is a specific class of NBFC. Despite the fact that not directly controlled by the RBI, still RBI has right to give mandates for them identified with their store acknowledgment exercises. Besides, on the grounds that these Nidhi is manage their investor individuals just, they have been absolved from the center arrangements of the RBI Act and different headings material to NBFCs. Accordingly, Nidhi Company is a perfect lawful element to take a store from and loan to a particular gathering of individuals

Nidhi Company Registration

Section 406 of the Companies Act of 2013 and the Companies (Nidhi Companies) Rules of 2014 give all the arrangements concerning the joining and administration of the Nidhi Companies in India.

The rules and directives for the Nidhi Companies are likewise given by the RBI. These are chiefly identified with financial activities and investments by companies including the NBFCs.

Due to the explanation that the Nidhi Companies are occupied with the business of deposits and loans by its individuals just, certain exceptions have been given to these organizations, by the RBI.

The interest charged at the loans under a Nidhi Company is very sensible. The reasons these are looked for are, basically, fabricating/redesign of houses or youngster’s training, and so forth. The advances are given against security as it were. The deposits under Nidhi do not earn much interest as compared to deposits in the sorted out banking sector.

 

All loaning and acquiring of the Nidhi Companies are finished by its individuals, only. Consequently, such organizations are additionally alluded to as Mutual Benefit Societies. Since they work for the common advantage and government assistance all things considered.

In the event that you are hoping to begin a business in financing or advances in India, at that point Nidhi Company is the best choice for it

Documents Required

  • 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 individuals to save so that they can meet their monetary prerequisites emerging from time to time easily. By being thrifty they become independent and would meet the future costs that may come up. And the advantage of getting a company enlisted as Nidhi doesn’t end there.

There are lots of favorable benefits to forming a Nidhi Company. Some are listed below:

  • Liability is Limited: Liability of Directors and investors of the Nidhi Company is restricted. On the off chance that the organization experiences any misfortune and countenances monetary pain over the span of its business movement, the individual resources of any of the Directors or individuals are not in danger of being seized by banks, creditors, and government.
  • Less Regulations: Nidhi organizations are administered under the Nidhi Rules, 2014. The Central Government is the directing power controlling its exercises and working. Rules forced by the RBI on Nidhi’s are not many.
  • Better Credibility: Nidhi companies appreciate better validity instead of some other individuals based associations like Trusts, Cooperative Societies or NGOs. 
  • Better Option for Savings : The main purpose of Nidhi Company’s incorporation is to encourage the habit of saving among the members of the Company. This is how it achieves the other goal of its registration of being mutually beneficial. The Nidhi Companies are to lend and borrow money to and from its shareholders/members only.
  • Easy Access of Public Funds: The loans from the Nidhi Company come at a less expensive rate than advances from banks and othert NBFCs. For its investors. And the way toward acquiring the loan and tweaked administrations are substantially more advantageous and snappier.
  • Ease of Fund: Nidhi Company is the most secure and the least expensive method for welcoming stores from the overall population. You simply need to accept them as enlisted individuals.
  • Micro Banking: Nidhis give banking services to the remote and rural public of India which still is depend in far-off locations and is, thus, without getting to back from national banks and NBFCs.
  • Better Credit Co-operative Society: Nidhi Company is a nearby substitute for credit co-employable society. Furthermore, along with these lines, increasingly favored by the small financer. When a Nidhi organization has been enlisted, the individuals can profit of the considerable number of advantages of credit co-operative society.
  • Simple Processing: Borrowing and loaning to known people, having a place with a similar gathering, is substantially less confounded than managing banks, where the method is generic and fixed.
  • Easy Registration Process: The procedure to enroll Nidhi Company with LegalRaahi is very easy and transparent. You don’t have to take any permit from RBI. You simply need to incorporate your organization as an open constrained one with the MCA.
  • Single Regulatory Body: After the Amendment in Companies act 2013, Nidhi Companies are supervised by Nidhi Company Rules.
  • Low Capital Requirement: Ministry of Corporate Affairs (MCA) orders that the base capital prerequisite of Rs. 5 lakhs for Nidhi. And more, within 1-year, the capital must be raised to at any rate Rs. 10 lakhs. The Fees, DIN, DSC and Other Expenses are approx. Rs. 25-30,000. These incorporate Government expenses that vary from State to State.
  • Fulfilling the needs of Lower & Middle-income groups: Nidhi Companies assume a significant job in addressing the requirements of lower and center pay bunches 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, Nidhi Company is a good option to obtain finance because of fewer conditions.
  • No External Involvement: Nidhi Companies take assets from their individuals and further gives credits to their individuals as it were. All exchanges are done inside this gathering as it were. In this way, no outer variables are influencing the working of these organizations. The financial specialists/individuals themselves direct the tasks of the organization.
  • Separate Entity: Nidhi Company is a different legal entity that can get resources and bring about obligations in its own name.

What is included in Our Nidhi Company Registration Package

DIN for 3 Directors

Digital Signature For 3 Directors

Name search & approval

MOA/AOA

Registration Fees

Company Pan Card

Key Features

Few points about the working of Nidhi Companies in India, as cited in Rule-6 of the Nidhi Rules of 2014, are critical to note:

  • It can’t convey any of the following types of exchanges. Such as hire purchase finance, chit fund, leasing finance, insurance, or acquisition of securities issued by any corporation.
  • It can’t acknowledge stores from or offer advances to some outside individual or company.
  • A Nidhi Company isn’t engaged to give inclination offers, debentures, or some other obligation instruments in any structure.
  • Companies Act 2013 and Nidhi Rules 2014 are the administering bodies controlling the capacities and activities of Nidhi Company in India.
  • Nidhi Company doesn’t go under the purview of RBI. Along these lines, Nidhi needn’t bother with any permit from RBI to work an advance business.
  • It isn’t designate for perform vehicle fund business or microfinance business in India.
  • Within a year of enrollment, the quantity of individuals must be at any rate 200.
  • A most extreme loan cost of 20% p.a. (determined by the lessening balance technique) can be charged.
  • The most extreme rate of premium that can be offered on sparing store account will not surpass 2% over the rate offered by Nationalized Banks.
  • Nidhi Company can acknowledge FD, RD and reserve funds and can acquire an enthusiasm of 12.5% as of now.
  • Rate of Interest that can be offered on Fixed and Recurring Deposit will not surpass the most extreme rate of intrigue endorsed by RBI for the NBFCs to offer on their stores. The most extreme constraint of therate of enthusiasm for NBFCs is likewise material to the Nidhi organizations.
  • Activities restricted to region level for the initial 3 Years. After fulfillment of 3 years, 3 workplaces can be set up inside a similar area. For development out of the region, earlier endorsement from the Regulator Director is required.
  • It can only give loans against security. These securities may be Gold, Property, Fixed Deposits, Government Securities or Life Insurance Certificates.
  • Unhampered stores (Deposits not offered as protections for any reason) should not be under 10 % of remarkable deposits.
  • Filing of Audit, Tax Returns, and Annual Accounts in the best possible configuration is necessary.

Procedure for Nidhi Company Registration

Though the process of enrolling a Nidhi Company is easy, still, help from an expert is encouraged to finish the different complex forms, filing them and within time. Moreover, In addition, the administration entryways and language are a piece on the difficult side, as well.

Furthermore, LegalRaahi is a specialist in Nidhi Company Incorporations, with more than 7 years of involvement with the field and effectively enlisting more than 500 Nidhi Companies. Our tasks are spread all over India

Step 1: Applying for DIN and DSC

To begin with, the Directors of the Nidhi Company are to apply for DIN (Director’s Identification Number) and DSC (Digital Signature Certificate). DIN is given by the MCA and DSC is an advanced mark utilized for all e-documenting forms. This progression can be skipped for the Director who as of now has DIN and DSC

Step 2: Name Approval

Presently, you have to pick and propose 3 distinct names to MCA for your Nidhi Company. Out of these 3 names, just one will be acknowledged for your Company by MCA. The proposed names must be special and not coordinating to the names of other previously enlisted organizations. According to Rule 8 of the Company Act. The affirmed name will stay legitimate for 20 days as it were

Step 3: MoA & AoA

Affiliation) and AoA (Articles of Association). These must specify the main motive of incorporative a Nidhi company as a cause. The MoA and AoA are to be documented to the ROC (Registrar of Companies) with the membership articulation

Step 4: Certificate of Incorporation (CIN)

It takes between 15-25 days to frame a Nidhi company and get the incorporation certificate. This certificate proclaims that an organization has been made and it specifies the company identification number (CIN) too. 

Step 5: PAN, TAN and Bank Account

In conclusion, you have to apply for PAN and TAN. The PAN and TAN are generally gotten inside 7 working days. Afterward, you need to get a financial balance opened by presenting the Certificate of Incorporation, MoA, AoA, and PAN to the bankLastly, you need to apply for PAN and TAN. The PAN and TAN are usually received within 7 working days. Later, you have to get a bank account opened by submitting the Certificate of Incorporation, MoA, AoA, and PAN to the bank.

Important Points

Minimum Requirement

  • A Section 8 Company gets incorporated by the MCA.
  • All necessities of the Companies Act 2013, for example, the minimum number of Directors and Shareholders, and so on must be met with.

Charitable Object  

  • Section 8 Companies can be built up for non-benefit goals only. Any benefit earned or income received by this Company is not to be dispersed among its individuals.
  • This infers the pay will either be reinvested in the business or used for the advancement of its fundamental items, for example charitable reason.

Management Team 

 Not at all like different Trusts which are represented by the Trustees according to a Trust Deed, are the activities of Section 8 Companies overseen by the Board of the Director according to their MoA and AoA

Companies Act, 2013   

must follow the arrangements recommended under the Companies Act, 2013. Maintaining Book of Accounts, Return Filing, Audits, Board Meetings, and so on

MoA & AoA

A Section 8 Company will not roll out any improvements to the arrangements of its MoA and AoA without looking for endorsement from the Central Government first

Voting Rights

The voting rights of the investors of a Section 8 Company depend on the quantity of shares held by them. Like that of some other organization

Income tax 

The Company needs to follow the arrangements of the Income Tax Act

GST Registration

On the off chance that Section 8 Company goes under the domain of the GST Act, it must get registered with GST

Conversion

It may not change over itself to some other sort of organization structure without conforming to conditions, as material

Restrictions on Nidhi Company

Despite the fact that the sole motivation behind Nidhi company is taking up non-banking financial activities, they are denied to play out those exchanges that may include involve external factors and public, taking risks, etc. Such as:

  • Publicize themselves to encourage deposits,
  • Chit funds,
  • Leasing Finance,
  • Hire-Purchase finances,
  • Lotteries,
  • Insurance,
  • 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 share holders 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 Nidhi Company Incorporation

Given below are the essential conditions that must be met with for registering or operating 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 needs to present the rundown of individuals within 90 days from the finish of each money related year, right now.
  • NDH-2 Form: It can request MCA for an extension in this Form, in case it has not been able to add 200 members in its first financial year.
  • NDH-3 Form: Other than the above NDH-1 Form, a half-yearly return is likewise required to be documented in NDH-3 Form.
  • Annual Returns with ROC: The Nidhi Company needs to record its Annual Returns with MCA through Form MGT-7.
  • Profit & Loss Statement and Balance sheet: The budget summaries and other related archives are to be submitted, yearly, 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 deposit Nidhis can accept. These are Savings, Fixed Deposit (FD), 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.).
  • Nidhi cannot engage in the business of microfinance but can lend at up to 20% interest against security.
  • It can take legal action if a member fails to repay any sum of money.

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Frequently Asked Questions

What is Nidhi Company?
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