Nidhi Company Registration Process
Nidhi Company in India is a type of non-banking financial company (NBFC) in India that primarily lends and borrows money from its members. Such organizations aim to promote thrift and saving practices in the community and are regulated by the Ministry of Corporate Affairs (MCA) and the Reserve Bank of India. The Registration guru will help you through the entire process of incorporation of a Nidhi Company.
Key Features of a Nidhi Company
1 Member-focused: The corporation can only accept deposits, borrow money, and provide benefits to its members.
2 Encourages Saving: Allows members to adopt a culture of saving and investment.
3 Localized Operations: Programs are limited to members of a given locality.
4 No RBI Approval Required: Nidhi companies unlike other NBFCs do not require approval from the Reserve Bank of India to operate.
Eligibility Criteria for Nidhi Company Registration
1 Minimum Members: There must be a minimum of seven members, at least three of whom shall serve as directors.
2 Capital Requirement: The paid-up equity share capital must be at least Rs 5 lakh.
3 Unique Name: The name of the company must include the words “Nidhi Limited.”
3 Purpose: Its main objective should be to encourage members to save and borrow.
Step-by-Step Registration Process
1 Obtain Digital Signature Certificate (DSC)
· To sign electronic papers, all nominee directors must first obtain a Digital Signature Certificate.
· DSC are issued by authorized agencies after verification of the identity of the applicant.
2 Apply for Identification Number (DIN)
· Directors need to submit Form DIR-3 to obtain DIN.
· Provide identification documents such as PAN, Aadhar, and Address Proof.
3 Name Reservation
· Form RUN (Reserve Unique Name) should be filed with the Registrar of Companies.
· Make sure the name includes the words Nidhi Limited and follows naming standards.
4 Prepare the Memorandum and Articles of Association (MOA & AOA)
· The Memorandum of Association specifies the company’s objectives and commercial activities with a focus on promoting saving and lending among members.
· The Articles of Association specify the rules and regulations of the company.
· Directors must sign both agreements and submit them to the MCA.
5 File for Incorporation
· Use SPICe+ to file the incorporation application.
· Submit the following documents:
MOA and AOA
PAN and TAN application
Proof of registered office address
Declaration by directors and subscribers
6 Obtain a Certificate of Incorporation
· After approval a Certificate of Incorporation is issued by the Registrar of Company.
· This document provides the Corporate Identification Number which represents the legal existence of the company.
7 Apply for PAN and TAN
· After incorporation apply for Permanent Account Number (PAN) and Tax Deduction and Collection Number (TAN) of the company.
8 Open a Bank Account
· To open a current bank account in the name of the company, submit the Certificate of Incorporation PAN and other required documents.
9 Apply for Nidhi License
· After incorporation, apply for an MCA license to operate as a Nidhi Company.
· Before starting lending or borrowing activities ensure you are compliant with the Nidhi Rules 2014.
10 Meet Post-Incorporation Requirements
· Within 1 year ensure the company meets the following conditions:
Minimum of 200 members.
Net owned funds of Rs 10 lakh
Ratio of net owned funds to deposits should not exceed 1:20
· Submit Form NDH-1 to the ROC.
Compliance for Nidhi Companies
1 Keep accurate books of accounts and financial records.
2 The Roc requires annual returns and financial disclosures.
3 Avoid Speculative investments such as chit funds and insurance.