{"id":1463,"date":"2021-01-19T11:27:56","date_gmt":"2021-01-19T11:27:56","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=1463"},"modified":"2021-01-19T11:27:58","modified_gmt":"2021-01-19T11:27:58","slug":"is-it-possible-to-make-members-in-nidhi-company","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/","title":{"rendered":"Is it Possible to Make Members in Nidhi Company: Step by Step Guide"},"content":{"rendered":"\n<p class=\"has-drop-cap\">A Nidhi Company is an NBFC (which does not required RBI approval) that works for its members by accepting deposits and lending funds. One of the most important criteria of Nidhi Company is that it works for its members only. It cannot accept deposits nor can it lend funds to any other person other than its members. To make any person a member of Nidhi Company, one share must be given to him. However, in cases where the member wants to have fixed or recurring deposit, the number of shares shall be 10. This article will talk about whether is it possible to make members in Nidhi Company or not. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a62bea06de\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a62bea06de\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/#How_to_make_members_in_Nidhi_Company\" title=\"How to make members in Nidhi Company? \">How to make members in Nidhi Company? <\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/#By_way_of_Allotment_of_New_Shares\" title=\"By way of Allotment of New Shares\">By way of Allotment of New Shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/#By_way_of_Transfer_of_share_of_existing_members\" title=\"By way of Transfer of share of existing members\">By way of Transfer of share of existing members<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/#What_is_the_Procedure_to_make_members_in_Nidhi_Company\" title=\"What is the Procedure to make members in Nidhi Company?\">What is the Procedure to make members in Nidhi Company?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/#Chose_and_divide_shares\" title=\"Chose and divide shares \">Chose and divide shares <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/#Attach_share_certificate_with_SH-_4_Form\" title=\"Attach share certificate with SH- 4 Form \">Attach share certificate with SH- 4 Form <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/#Attach_along_with_Membership_Form\" title=\"Attach along with Membership Form\">Attach along with Membership Form<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/#Hand_over_the_Share_Certificate\" title=\"Hand over the Share Certificate\">Hand over the Share Certificate<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/#Pass_board_resolution_for_each_entry\" title=\"Pass board resolution for each entry \">Pass board resolution for each entry <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/#Details_to_be_entered_in_Share_Transfer_Register\" title=\"Details to be entered in Share Transfer Register \">Details to be entered in Share Transfer Register <\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/#Nidhi_Company_Registration_Procedure\" title=\"Nidhi Company Registration Procedure \">Nidhi Company Registration Procedure <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/#Documents_required_for_Nidhi_Company_Registration\" title=\"Documents required for Nidhi Company Registration \">Documents required for Nidhi Company Registration <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/blog\/is-it-possible-to-make-members-in-nidhi-company\/#Conclusion\" title=\"Conclusion \">Conclusion <\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_make_members_in_Nidhi_Company\"><\/span>How to make members in Nidhi Company? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In order to make\nmembers in Nidhi Company, a Nidhi Company shall: &#8211;<\/p>\n\n\n\n<ul><li>Not allow a Trust or a corporate body or a minor\nto be a member and ensure that its members are not decreases to less than 200\nat any time. <\/li><li>Allot minimum shares to each deposit holder a\nminimum 10 shares of 10 each which are equal to Rs. 100 and at least 1 share of\nRs 10 to saving account holder. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"By_way_of_Allotment_of_New_Shares\"><\/span>By way of Allotment of New Shares<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A Nidhi Company can allot new shares to its new members. According to the provisions of the <strong>companies Act<sup><a class=\"text-primary\" href=\"https:\/\/www.mca.gov.in\/Ministry\/pdf\/CompaniesAct2013.pdf\"><strong><em>[1]<\/em><\/strong><\/a><\/sup><\/strong>, there is a present exemption through which section of right issue and private placement is not applicable to Nidhi Company, therefore the allotment of shares can directly be done by Board of Directors of the Company through passing a resolution. It is important to note, that the number of shares should not exceed authorized share capital of the company. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"By_way_of_Transfer_of_share_of_existing_members\"><\/span>By way of Transfer of share of existing members<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Nidhi Company being a <strong><a class=\"text-primary\" href=\"https:\/\/swaritadvisors.com\/public-limited-company-registration\">Public Limited Company<\/a><\/strong>, the existing shareholder of Nidhi Company may transfer his shares to another person as the shares of the public limited company are freely transferrable. In this case, a person will also become a member of the Nidhi Company once his name is entered in the register of members.<\/p>\n\n\n\n<p>Out of the above\ntwo ways, the second method is the cheapest, quickest and the best way to make\nmembers in Nidhi Company because the allotment happens hand to hand with no\nseparate filing to the Ministry of Corporate Affairs (MCA) each month. Every\nmember is given 1 share (10 shares in case of fixed deposit) of Nidhi Company\nto complete membership procedure. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Procedure_to_make_members_in_Nidhi_Company\"><\/span>What is the Procedure to make members in Nidhi Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/01\/11992-swarit.png\" alt=\"process to make Nidhi Company members\" class=\"wp-image-1464\" width=\"714\" height=\"368\" srcset=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/01\/11992-swarit.png 768w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/01\/11992-swarit-300x155.png 300w\" sizes=\"(max-width: 714px) 100vw, 714px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Chose_and_divide_shares\"><\/span>Chose and divide shares <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Choose any one\nperson\u2019s shares and divide them into small share certificates equal to either 1\nshare or 10 shares depending upon the requirement. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Attach_share_certificate_with_SH-_4_Form\"><\/span>Attach share certificate with SH- 4 Form <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Form SH- 4 is\nused to give effect to share transfer. Form SH- 4 has to be attached with the\nshare certificates. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Attach_along_with_Membership_Form\"><\/span>Attach along with Membership Form<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Form SH- 4 and\nshare certificates are to be attached along with the membership form. The\ntransfer procedure is to be conducted and all the necessary details are\nrequired to be furnished with the share certificate and Form SH- 4.&nbsp; <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Hand_over_the_Share_Certificate\"><\/span>Hand over the Share Certificate<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Once the shares\nare transfers and proper due diligence has been conducted in respect to share\ntransfer, the proper set of documents should be handed over to the applicant\nand one copy of the document will be kept in the company as a record. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Pass_board_resolution_for_each_entry\"><\/span>Pass board resolution for each entry <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The board\nresolution shall be passed at the end of the month validating the transfer of\nshares that took place during the month. The board resolution shall be passed\nat the end of every month. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Details_to_be_entered_in_Share_Transfer_Register\"><\/span>Details to be entered in Share Transfer Register <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is mandatory\nfor Nidhi Company to maintain a share transfer register and every detail\nregarding the transfer of shares shall be entered in the share transfer\nregister. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Nidhi_Company_Registration_Procedure\"><\/span>Nidhi Company Registration Procedure <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Nidhi Company Registration Process takes up around 45 days. The procedure to obtain <strong><a href=\"https:\/\/swaritadvisors.com\/nidhi-company-registration\" class=\"text-primary\">Nidhi Company Registration<\/a><\/strong> is as follows: &#8211; <\/p>\n\n\n\n<ul><li>To start the registration of Nidhi Company, minimum 3 directors and 7 members are required. <\/li><li>The applicant is required to apply for <strong><a href=\"https:\/\/swaritadvisors.com\/learning\/how-to-obtain-digital-signature-certificate-in-india\/\" class=\"text-primary\">Digital Signature Certificate<\/a><\/strong> (DSC) and Director Identification Number (DIN). <\/li><li>After getting the DSC and DIN, file an application in INC- 1 to Ministry of Corporate Affairs for the reservation of name of the Nidhi Company. <\/li><li>Upon the Approval of the name, prepare a Memorandum of Association (MOA) and Articles of Association (AOA) according to the objectives of the company and all the required documents carefully. <\/li><li>Apply for Incorporation. <\/li><li>Apply for PAN and TAN <\/li><\/ul>\n\n\n\n<p>The Ministry of\nCorporate Affairs (MCA) has issued an integrated incorporation form INC- 32.\nNow the companies can apply for incorporation online by filing a SPICe+ Form in\nForm INC- 32 using DSC of the director along with the e- MOA in Form INC \u2013 33\nand e- AOA in Form INC \u2013 34. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_required_for_Nidhi_Company_Registration\"><\/span>Documents required for Nidhi Company Registration <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Copy of ID proof of shareholders and Directors (Aadhar card, voter id, drivind license, passport)<\/li><li>Copy of PAN card of shareholders and Directors. <\/li><li>Copy of Address Proof of Shareholders and Directors ( electricity bill, telephone bill, bank statement)<\/li><li>Passport size photograph <\/li><li>Property ownership documents of registered office <\/li><li>If property owned then electricity bill, ownership documents and NOC if required. <\/li><li>If property rented then electricity bill, rent agreement and NOC <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The core business of Nidhi Company is borrowing and lending money between their members. It can accept, lend funds only from and to its members and is regulated by the Ministry of Corporate Affairs and Companies Act 2013. The main objective of Nidhi Company incorporation is to grow the habit of savings of the members. The procedure to make members in Nidhi Company can be done by two ways which is discussed above in the article. For a person to become a member in Nidhi Company, it is required to follow the complete procedure of membership to issue shares of the company.<\/p>\n\n\n\n<p><b>Also, Read:<\/b> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/operational-and-credit-policy-norms-for-nbfcs\">Operational and Credit Policy Norms for NBFCs: A Complete Guide<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A Nidhi Company is an NBFC (which does not required RBI approval) that works for its members by accepting deposits and lending funds. One of the most important criteria of Nidhi Company is that it works for its members only. It cannot accept deposits nor can it lend funds to any other person other than [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":1465,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[8],"tags":[191],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/1463"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=1463"}],"version-history":[{"count":9,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/1463\/revisions"}],"predecessor-version":[{"id":1475,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/1463\/revisions\/1475"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/1465"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=1463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=1463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=1463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}