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Nidhi Company Registration

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Starts Nidhi Company Registration from ₹ 34,999 /-

Nidhi Company Registration

Nidhi company is a class of Non-Banking Financial Company (NBFCs)which does not require any license from the RBI. Reserve Bank of India (RBI) is empowered to issue directions to them in matters relating to their deposit and acceptance activities.

Nidhi companies are allowed to take the deposit of the amount from its members and lend to their members only. Nidhi company registration requires a minimum of 3 members. All the Nidhi company’s incorporated shall have the last word as “Nidhi Limited” as part of its name.

All the provisions relating to the “incorporation and governance of the Nidhi Companies in India” are contained in Section 406 of the Companies Act of 2013 and the Companies (Nidhi Companies) Rules of 2014.

The RBI also issues the rules and regulations for the Nidhi Companies. These generally concern financial transactions and investments made by businesses, notably NBFCs.

The RBI has granted “Nidhi Companies” with some exemptions because they are solely involved in the business of accepting deposits and making loans to its members.

The interest rates applied to loans made through a Nidhi Company are relatively affordable. These are wanted for a variety of things, such building or renovating homes or spending in children’s education.

Characteristics of Nidhi Company

  1. MembersTo start a Nidhi Company minimum seven members or shareholders are required. But within 12 months of registration, the number of members or shareholders must be at least 200.
  2. DirectorsThe minimum number of directors shall be three out of the seven members or shareholders.
  3. Separate Legal Entity – It is a separate legal entity having the flexibility of acquiring assets and incurring debts in its own name.
  4. Easy processing – Since the lending is done withing the group of members it becomes easier as compared to the lending procedure from bank or other such platforms.
  5. Limited Liability – The personal assets of the directors and shareholders is free from any crucial and not at all at risk of being subjected by banks, government or by the creditors.

Prohibitions for a Nidhi Company

1. Dealing with chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities is a complete no for Nidhi Company.

2. Opening a current account with its members is also prohibited.

3. Other than its members Nidhi Company cannot accept deposits from or lend to any person.

4. Issuing preference shares, debentures or any other instrument of debt by some name or in any form can’t be done by Nidhi Company.

5. Advertising itself to ask for any deposits is another restriction of any Nidhi Company.

Advantages to Nidhi Company Registration

Helpful for Lower and Middle Classes
Minimum Documentation and Formalities
Secured Investments
Low Rates of Interest
No External involvement in Management
Why Legal Door Required documents How we process

Legal Door provides end-to-end solutions for private limited company registration in India. Our products include:

  • AOA and MOA drafting,
  • Company name research
  • Company name research
  • Application process.
  • Following up with the Ministry of Corporate Affairs.

Following are the documents required for company incorporation for each director/ shareholder

  • Self attested PAN card copy.
  • Four Photographs.
  • Self attested copy of any one of the Identity Proof like Driving License, Passport, Voter ID & Adhaar Card
  • Self attested copy of any one of the Address Proof like Bank Pass Book/ Bank Statement, Telephone Landline Bill, Mobile Bill & Electricity Bill
  • Company Address proof Electricity Bill, Telephone Bill, Mobile Bill & Gas Bill, AND Rent Agreement (if rented) AND NOC for doing Business & for taking Registration.
  • Step 1: Receiving Documents & Apply, DIN & DSC 1-2 Days.
  • Step 2:Drafting MOA and AOA electronically in Spice MOA (INC-33) and Spice AOA (INC-34) 5-8 Days
  • Step 3: Submission of Spice Form INC-32 along with link Form Spice MOA (INC-33) and Spice AOA (INC-34)
    9 to 14 Days
  • Step 4: Certificate Of Incorporation, PAN & TAN 15 to 20 Days

FAQ

Each Nidhi is required to maintain Net Owned Funds of at least ten lakh rupees, or the larger amount that the Central Government may from time to time prescribe, excluding the proceeds of any preference share capital.

Nidhi companies are required to charge interest rates on loans that are no more than 7.5 percent more than the highest rate of interest Nidhi offers on deposits. The declining balance approach must be used to compute the interest rate.

Money can be deposited, lent, or borrowed by anyone according to the Companies Act of 2013’s provisions. As a result, they can all join a Nidhi Company. if they are not a business or corporation.

In a given district, a minimum of three branches may be established. The Registrar of Companies must be notified 30 days in advance of the opening of any additional branches or plans to expand outside of the district.

No, Minors are not permitted to join Nidhi as members, although deposits made by a minor’s natural or legal guardian who is also a member of Nidhi may be accepted in that minor’s name.

No, Trust or Body Corporate can not be admitted as a member of Nidhi Company.

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