Nidhi Company Registration

Nidhi Company Registration

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An NBFC and a Nidhi firm are quite similar. Deposits from a closed group of people known as members of a Nidhi Company, on the other hand, maybe accepted. We’ll be there to assist you throughout the Nidhi Company Registration procedure.

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    What is a Nidhi Company?

    A Nidhi Company is founded to borrow and lend to its members with the goal of encouraging members to save money and operates on the premise of mutual aid. In India’s southern states, Nidhi enterprises are quite popular. A Nidhi Company, unlike an NBFC, is not required to obtain an RBI license. As a result, it is simple to implement. To begin, you must first form a public limited company with the word “Nidhi Limited” as the last word in its name. Second, when the number of shareholders reaches 200 within one year after incorporation, a separate application for Nidhi Company Status is filed with the ROC. The Company is unable to advertise that it is accepting deposits from the general public. It must also maintain its borrowing and advancing efforts inside its own ranks.

    Requirements to start a Nidhi Company

    Unique Name

    The company’s name should be distinctive, and it should not be the same as or similar to the name of another business or a trademark.

    Number of Members

    As a public limited company, it starts with seven members; but, to attain Nidhi Company Status, it must have at least 200 members in a year.

    Capital Requirements

    Nidhi Company Status requires a minimum of Rs. 10,00,000 in paid-up equity capital from at least 200 members.

    Prohibited Activities

    Activities like Chit Fund, Hire-Purchase Finance, Leasing Finance, Insurance or Securities Business is strictly prohibited.

    Procedure for Nidhi Company Registration

    Because the Company Incorporation application is submitted online, the process begins with the issue of class two digital signatures.

    Documents Required

    • Two Photographs of Promoters
    • Identity Proof of each Promoter
    • Address Proof of each Promoter
    • PAN Card of each Promoter
    • Signed Declaration(s) from Promoters
    • Proof of Registered Office
    • Utility Bill as Proof must be latest
    • NOC from the Owner of Premises

    Need any further assistance with business compliances and filings?

    Frequently Asked Questions

    A Nidhi Company is one that accepts deposits and then lends them out on demand. Nidhi Companies are similar to NBFCs, however, the main difference is that Nidhi Companies only accept deposits from their members. These organizations’ principal goal is to work for the mutual benefit of their members. These businesses are not permitted to engage in hire purchase financing, insurance, chit funds, securities acquisition, or the issuance of any debt instruments.

    The following provisions are applicable to Nidhi Companies.

    1. As they are incorporated into the nature of Public Company so rules and regulations of the Companies Act, 2013 are applicable.
    2. RBI provisions related to Interest rate payable on deposit are applicable to Nidhi Companies. But the core provisions of RBI are not applicable to Nidhi Companies as RBI has exempted the Nidhi Companies from the same.
    3. Nidhi Rules, 2014.

    ed in a proprietorship. However, with previous authorization from the Indian government, an NRI or a Person of Indian Origin (POI) can invest in a proprietorship.

    A Nidhi Company must be registered as a Public Limited Company in order to be formed. To form a Nidhi Company, you must first meet the following requirements:

    • It should have a minimum of three directors.
    • It should have a minimum of seven members.
    • The fundamental goal that should be included in the MOA is to instill in its members the habit of saving and thrift.
    • It can only accept deposits and lend money to its members, and it will work for their mutual advantage.

    Once the Nidhi Company is incorporated it must fulfill the following requirements:

    1. It must have at least 200 members/shareholders.
    2. Minimum Net Owned Fund should be Rs. 10 Lakhs.
    3. Unencumbered term deposit must be at least 10% of the term deposit.
    4. The ratio of Net Owned Fund to term deposit should not be less than 1:20.

    The exclusive advantage which is offered by Nidhi Companies are:

    1. It is a single office institution governed exclusively by its members with no involvement of a third party.
    2. Provide loans at minimal interest rates and minimum documentation.
    3. Secured investments are guaranteed by such companies.

    Yes, deposits with such organizations are safe and secure since the Reserve Bank of India and the Ministry of Corporate Affairs have enacted rules and regulations to assure deposit safety and security. The Nidhi Company is also required to follow the rules of the Central Government.

    The funds are used by the Nidhi Company to lend to shareholders in accordance with Nidhi Rules. It gives money to businesses and individuals in the form of small loans.

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