What is Nidhi Company Registration?

Nidhi Company is defined under Section 406 of Companies Act, 2013and Companies (Nidhi Companies) Rules, 2014.A Nidhi company belongs to the class of non-banking finance sector firms. 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 acceptance of deposits. The rudimentary business of Nidhi Company is to empower lending money and encouraging savings between the members of the company.

Main Objectives of Nidhi company

  • Nurturing the habit of saving a money.
  • Lending money to and receiving deposits from its members only, for their common benefit.

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. Compulsorily shall have last words as 'Nidhi Limited' as parts of its name. The company should have minimum 3 directors and 7 members. The first director of the company can be the member in 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. Net owned fund of Rs. 10,00,000 (within 1 year )

4. Unencumbered term deposit not less than 10% of o/s deposits.

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

What is restricted Activity after Registration of Nidhi Company?

  • Carry on or take up a business-like chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities by 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?

  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/-

Deposits

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 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 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 to encourage saving among the members of the company and thus to achieve mutual benefit the Nidhi Company 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 allows its members to expose the potential of their money and gain at lower interest rate when they are in need of money themselves.

28800
No of Orders
10000
Satisfied Customers
2000
Company Created
150
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