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What is Nidhi Company Registration?

A Nidhi company registration belongs to the class of non-banking finance sector firms. The Nidhi Company registration empowers lending money and encouraging savings between the members of the company. Nidhi Company is defined under Section 406 of Companies Act, 2013 and Companies (Nidhi Companies) Rules, 2014. The Nidhi Companies is governed/ruled by the Central Government, Reserve Bank of India (RBI) is empowered to give directions regarding the matters related to the acceptance of deposits.

Main Objectives of Nidhi company Registration

  • Nurturing the habit of saving money.
  •  Lending money to and receiving deposits from its members only, for their common benefit.
  • Nidhi is the safest and the cheapest way of raising funds from the General public (just by registering them as members).

Initial Share Capital Requirement & shareholder requirement.

Minimum paid up share capital required for Nidhi company registration is only five lakh rupees. Every Company must be registered as a Nidhi Company. Compulsorily shall have last words as 'Nidhi Limited' as parts of its name. In Nidhi Company Registration the company should have a minimum of 3 directors and 7 members. The first director of the company in Nidhi Company Registration can be a member of the company.

Minimum Legal requirement need to be followed in first 12 months

Every Nidhi Company within the period of one year from the commencement, shall have

1. Minimum of 200 members (within 1 year )

2. Net owned fund of Rs. 10,00,000 (within 1 year )

3. An unencumbered term deposit is not less than 10% of o/s deposits.

4. Compulsorily filing of Annual Accounts, Audit and Tax returns.

5. The ratio of net owned funds to the deposit must not be more than 1:20.

6. The net owned fund of the company should be Rs. 10 lakhs or more. Note that the Net owned fund is the sum of paid-up equity share capital and free reserved as reduced by the stored and intangible assets appearing in the last audited balance sheet.

Our Nidhi Company Registration Services

  • We shall file the application for Nidhi company registration.
  • We shall also provide DSC & DINs as required by the directors and authorized signatories as well.
  • We will run the name availability check for the Nidhi company.
  • Basis the Nidhi company object, we shall draft the MoA & AoA
  • End to end solution for Nidhi company registration along with PAN & TAN of the company.
  • We shall also prepare the compliance calendar for Nidhi company.
  • We provide free legal advisory post incorporation.

Contact us for any related matter to Nidhi company registration.

What is the process of Nidhi Company Registration?

Step-1 : DSC and DIN Application

The authorized signatories, as well as directors, shall obtain DSC to sign forms digitally. The application is made before digital signature authority agents.DIN (Director Identification Number ) should be obtained by the directors of the Nidgi company.

Step-2 : Name reservation

Do check your proposed company name availability on MCA. Form RUN is used to check the name availability and approval over MCA.

Step-3 : MOA and AOA

The object of the Nidhi Company shall be drafted clearly. MOA (Memorandum of Association) and AOA (Article of Association) are important documents of the company; hence an expert must formulate these documents. MOA and AOA are filed with the Registrar of the Company.

Step-4 : Nidhi company registration application

For the Nidhi company registration E-form SPICE 32 is required to be filled along with necessary documents. MOA and AOA are also attached as the attachment in e-Form SPICE-32.

Step-5 : Certificate of incorporation

On receipt of the application for Nidhi company registration, Registrar of the company shall scrutinize it minutely. If the application is complete and correct in all respect, the registrar shall issue the certificate of incorporation.

What is restricted Activity after Nidhi Company Registration?

  • Carry on or take up a business-like chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities by a body corporate.
  • Open any current account with its member.
  • Accept deposits from or lend money to any person than its members.
  • Any assets in form of security provided by its own members should not be Pledged.
  • Accept deposits from or lend money to any kind of body corporate.
  • Enter into any kind of partnership arrangement in its borrowing or lending events.
  • Publish any kind of advertisement in any form of deposit etc.

What is regulation for Share capital and allotment related affairs in a Nidhi Company Registration?

  1. All Nidhi shall issue equity shares of the nominal value of not less than Rs. 10/- each
  2. There shall be No service charge imposed for the issue of shares.
  3. Each Nidhi shall give to its all deposit holder a minimum of 10 equity shares  at least or shares equal to 100/-

Types of Deposits and Terms of Deposit

Type of Deposit accepted Term
Fixed Deposit Minimum: 6 months
Maximum: 60 months
Recurring Deposit Minimum: 12 months
Maximum: 60 months

What is maximum Interest rate thereon on RD & FD?

  • Nidhi company cannot offer interest on deposit more than prescribed maximum rate by RBI for NBFC.
  • The Nidhi Company registration charges rate of interest on any loan given by it which shall not be more than 7 1/2 % above the highest rate of interest offered on deposits by Nidhi company and shall be calculated on reducing balance method

What documents are necessary for Nidhi Company Registration?

Directors: (3 directors) Company formation

DCS application
DIN application
Copy of Address proof
A copy of identity proof etc

After DIN & DSC Name approval and rest incorporation Documents form filing.

Advantages of Nidhi Company Registration?

Borrowing Is Cheaper For These Companies

The members of the Nidhi company can borrow at a cheaper rate from its own company at a cheaper rate as compared to the borrowing from banks. This is one of the major benefit to the members at in their difficult time or when they are in need.

Encourages Savings

One of the objectives of Nidhi company registration to encourage saving among the members of the company and thus to achieve mutual benefit the Nidhi Company registration lend and borrow money from its members only.

Fewer Complications In Processing

Borrowing and lending to known persons i.e its members, where the procedure is fixed, is much less complex than dealing with banks. A Nidhi Company registration allows its members to expose the potential of their money and gain a lower interest rate when they are in need of money themselves.

Limited RBI Regulations

Nidhi companies follow the Nidhi Rules, 2014 issued by the center in respect of the activities and working. Regulations imposed on Nidhi's by Reserve Bank of India is limited.

Limited Capital Requirment

Ministry of Corporate Affairs mandates the minimum capital requirement of Rs 5 Lakhs for Nidhis.

Easy Formation

It is very easy to form a Nidhi company. Nidhi Companies are not required to obtain a license from RBI. Nidhi companies just have to incorporate themselves as a public company with the Ministry of Corporate Affairs.

Lower Rate Of Credit

Loans at a very lower rate of interest are given to the members of a Nidhi company.

No Outsider Intervention

Nidhi companies are formed, managed and provide details to their members only. The outsider is not allowed to intervene in the working of the Nidhis. Outsider is not allowed to deposit money or avail credit from Nidhi Companies.

What are registration fees for Nidhi Company Registration?

Nidhi company registration fee is paid online. Following are the types of Nidhi Company registration fees in India.

  • Statutory Fees : This fees for company incorporation application depends on the authorized capital of the company. Rupees 1000 is to be paid for Name approval application and Rs 500 is applicable on Director
  • Stamp Duty : Stamp duty is payable on Memorandum of Association and Articles of Association. Since stamp duty is a state subject, therefore, it varies from state to state.

Annual compliance required after Nidhi Company Registration

The annual compliance for Nidhi company is important to avoid any penal consequences due to

non- compliance: The post incorporation annual compliance can be summed up by adherence to compliances pertaining to the following forms:

  • Form NDH-1
  • Form NDH-2
  • Form NDH-3

Form NDH-1

NDH-1 is the Return of Statutory Compliances. One should file NDH-1 along with the prescribed fees within 90 days from the closure of the first financial year after incorporation. However, the form needs certification by the practicing chartered accountant or company's secretary or cost and management accountant.

Form NDH-2

NDH-2 is the application for extension of time. Form NDH-2 is to be filed within 90 days from the closure of the financial year along with the prescribed fees. The Regional Director will then examine the application and pass orders within 30 days of the arrival of the application.

Form NDH-3

NDH-3 is known as the half yearly return. Form NDH-3  is to be filed within thirty days from the end of each half year with the prescribed fees. However, the form needs certification by the practicing chartered accountant or company's secretary or cost and management accountant.

The penalty for Non-Compliance by Nidhi Company Registration

The non –compliant company and every officer in default shall be held punishable with a fine up to Rs. 5000/-. In case he contravention continues then the company would be punishable with a penalty up to Rs. 500/- per day till the contravention continues.

Frequently Asked Questions on Nidhi Company Registration

Nidhi may open branches, only if it has earned net profits after tax continuously during the preceding three financial years. If a Nidhi proposes to open more than three branches within the district or any branch outside the district, it shall obtain the prior permission of the Regional Director. The intimation is to be given to the Registrar about the opening of every branch within thirty days of such opening.

No Nidhi shall open branches or collection centers or offices or deposit centers, or by whatever name called outside the State where its registered office is situated.

A Nidhi shall not accept deposits exceeding twenty times of its Net Owned Funds (NOF) as per its last audited financial statements.

The maximum balance in a savings deposit account should not exceed one lakh rupees and the rate of interest should not exceed 2% above the rate of interest payable on savings bank account by nationalized banks.

Every Nidhi shall issue equity shares of the nominal value of not less than ten rupees.

No service charge shall be levied for the issue of shares

Every Nidhi shall allot to each deposit holder at least a minimum of ten equity shares or shares equivalent to one hundred rupees

No, only secured loans can be provided.

  • Like gold, silver jewelry and immovable property can be taken, however, it shall be taken as security when the repayment time is less than one year.
  • In the case of immovable property the loan shall not exceed 50% of the value of the property offered as security - repayment time shall not exceed 7 years.
  • The loan may be given against the fixed deposit receipts, National Savings Certificates and other Government securities and insurance policies.

Their core business is borrowing and lending money between their members.

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