What is the concept of Nidhi Company Registration?
A Nidhi company is a class of NBFC operates to encourage savings of its members. Nidhi Company registration process is an online process that does not require RBI Approval.Nidhi company collects fund via Recurring deposit (RD) and Fixed deposit from its members, Further Lend to its members against gold, shares, RD, FD, Bonds and Properties. Nidhi company is required to register with the Ministry of Corporate Affairs.
You can Apply for Nidhi company registration online and secure Nidhi company license in 15-20 working days. If you plan to go for NBFC or Small Finance bank, then Nidhi company is right feet for you. Nidhi company considered as a good substitute of credit co-operative society and It is more convenient to operate & with Lessor compliance.
Main Objectives of Nidhi Company Registration
- Savings – Nidhi Company Opens saving Account of its member, similar to a bank and Promoting the habit of saving money among Members.
- Loan – Nidhi Company only lends to its members
- Ease of Fund - Nidhi is the safest and the cheapest way of raising funds from the General public (just by registering them as members).
- Micro Banking – Provides Rural banking services to the remote population of the nation which is still devoid of national banks and NBFCs.
Nidhi Company Registration Requirement
1. Capital Requirement – If you are willing to apply for Nidhi company, a Minimum paid up share capital of Rs. Five lakh is required. The last name of Company Must end with Nidhi Limited.
2. Minimum 3 Directors –The Age of directors must be18+ Years, and Family members are also eligible to join as a director.
3. Shareholders – Minimum 7 Share shareholders required. Directors can also own shares in Nidhi Company.
4. No Minimum Shareholdings – If you are willing to keep maximum control over the business you can even retain 99.99% shares
5. No Finance Experience Required – If you are not having any experience with NBFC or Bank or Nidhi, Do not worry, you are still eligible for Nidhi company License.
Nidhi Company Registration Process
For registering a Nidhi company, you shall require to avail our CA services, and we will ensure to finish below steps within 15-20 working days.
- Day1 - DSC and DIN Application
- Day 2- Name reservation
- Day 6 - Drafting of MOA and AOA
- Day 7- Notary And Stamping
- Day 8- Online Form filing Spice 32
- Day-12- Certificate of incorporation
- Day 13- PAN & TAN Ready
- Day -15 Bank Account Opening
- Day – 20 Appointment of Auditor
- Day 30- Software, RD & FD Plan Ready
Documents required for Nidhi Company Registration
Nidhi company Registration is completely Online Process. Following are the mandatory self-certified documents for the registration purpose: You need to scan and send to [email protected] with your order No in Subject.
A) From Directors & Shareholders
- Pan Card
- Election Id Card or Passport
- Latest Bank Statement or a copy Electricity Bill
B) From Registered Office
- Notarized Rent Agreement & Electricity Bills Note – You can register Nidhi company on your residence address as well can use the house or office address of relatives or friends.
Minimum Legal requirement For Nidhi Company
Every Nidhi company is expected to meet the below compliance requirement as per Nidhi company Rule 2014.
- Minimum 200 members (within one year )
- Net owned fund of Rs. 10,00,000 (within 1 year )
- An unencumbered term deposit is not less than 10% of o/s deposits.
- Compulsorily filing of Annual Accounts, Audit, and Tax returns.
- The ratio of net owned funds to the deposit must not be more than 1:20.
Ten Restricted Business Activities for a Nidhi Company
- Carry on or take up a business of chit fund,
- Hire purchase finance, leasing finance, insurance or acquisition of securities by a body corporate.
- Open any current account with its member ( Can Open Saving Bank Account )
- Accept deposits from or lend money to any person other than its members.
- Pledging of any assets in the form of security provided by its members.
- Accept deposits from or lend money to any Body corporate.
- Enter into any kind of partnership arrangement in its borrowing or lending events.
- Publish any advertisement for any form of deposit etc.
- All Nidhi shall issue equity shares of the nominal value of not less than Rs. 10/- each
- Each Nidhi shall provide to all its deposit holders a minimum of 10 equity shares at least or shares equal to the value of INR100/-
Benefits of Nidhi Company Registration
Better Option than Credit Co-operative - Nidhi company is most preferred by the small financer as this is a close substitute of credit co-operative society After you register Nidhi company you have all other benefits of credit co-operative society as well double deposit advantages.
Easy Access of Public fund - The members of the Nidhi company can borrow money at a cheaper rate from its own Company as compared to the borrowings from banks and other NBFCs. Moreover, they have access to quick lending procedures and customized services.
Better Saving Option - One of the objectives of Nidhi company registration is to encourage saving among the members of the Company and thus to achieve the goal of mutual benefit. The Nidhi Companies lend and borrow money to and from its members only
Easy processing - Borrowing and lending to known persons i.e., its members, where the procedure is fixe is much less complicated 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 need to cash themselves.
Limited Regulations - Nidhi companies follow the Nidhi Rules, 2014 issued by the Central Government in respect of its activities and working. Regulations imposed on Nidhi by Reserve Bank of India is limited.
Low Capital Requirement - Ministry of Corporate Affairs mandates the minimum capital requirement of INR 5 Lakhs for Nidhi. However, within one year, the capital shall be increased to at least INR10 lacs. Easy Registration Process
It is straightforward to register Nidhi company. Nidhi Companies are not required to obtain a license from RBI. Nidhi companies have to incorporate themselves as a public company with the Ministry of Corporate Affairs.
Nidhi Company Registration Fees After the Amendment in Companies act 2013, Nidhi company is government by Nidhi company rule as well Companies act 2013.
- Government Fees, DSC & Other Expenses is approx. Rs. 8000. Government fees vary from State to state to State
- CA Fees is Approx. Rs. 12,000 Total Cost will be approx. 20,000*
Ministry of corporates is the regulator of Nidhi company and As Per Nidhi Rule since it’s a deposit-taking entity hence higher level of regulatory norms has been introduced by the Central Government.
- Form NDH-1 – Within 90 days from Closure of Financial year
- Form NDH-2- In case not able to complete 200 Members in 1st Financial year
- Form NDH-3- Half yearly return along with Certificate from CA/CS
- Accounting & Book Keeping – Every Month
- Board Meetings – Quarterly 6. Member Meetings – Annually
- AOC 4 – Need to File one In a Year
- MGT 7- Once In a Year
- Income Tax Return – by 30th September
Why choose Swarit Advisors?
- 20+ Years of Experience
- Rank 1 In NBFC & Financial Advisory services
- 150+ Team of CA/CS/Lawyers
- 4.8 Star Rating our Clients
- More Than 200+ Nidhi Company Registered
- Low-Cost Nidhi Company Software
- 150+ Team of CA & CS for Your Business
- 20+ Offices
- 500+ Cities Served
- In case any questions or Wish to Apply for Nidhi Company
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.