OVERVIEW
Nidhi Company is a type of non-banking financial company (NBFC) that is created for the sole purpose of promoting savings and investment among its members. The word “Nidhi” in Hindi means “treasure”, and hence Nidhi Companies are also known as mutual benefit societies.
Nidhi Companies are governed by the Ministry of Corporate Affairs (MCA) in India and regulated by the Reserve Bank of India (RBI). These companies are created to cultivate the habit of thrift and savings among its members and to provide them with access to credit facilities at a reasonable rate of interest.
The primary objective of a Nidhi Company is to mobilize savings from its members and lend funds to its members. Nidhi Companies accept deposits from its members and lend funds to other members who are in need of financial assistance. The interest rate charged on such loans is generally lower than what is charged by commercial banks.
Nidhi Companies are allowed to operate only within a specific district, and they cannot expand their operations beyond that district without obtaining prior approval from the RBI. Also, Nidhi Companies cannot issue any kind of debt instruments or raise funds from the public. The members of the company can only contribute to the common pool of funds and earn dividends on their investments.
It is important to note that Nidhi Companies are different from other types of NBFCs, as they are primarily formed for the benefit of their members and not for profit-making. Nidhi Companies are required to maintain a minimum net owned fund of Rs. 10 lakhs and to comply with various other regulations prescribed by the RBI.
Types of Nidhi Company Registration:
Nidhi companies are a type of non-banking financial company (NBFC) that primarily cater to the savings and credit needs of its members. There are two types of Nidhi Companies recognized under the Indian Companies Act, of 2013:
- Public Limited Nidhi Company: This type of Nidhi Company must have at least seven members and three directors, and its minimum paid-up equity share capital must be Rs. 5 lahks. Additionally, it should have a minimum of 200 shareholders, minimum net owned funds of Rs. 10 lakhs, and unencumbered deposits of at least 10% of the outstanding deposits.
- Private Limited Nidhi Company: This type of Nidhi Company must have at least two members and two directors, and its minimum paid-up equity share capital must be Rs. 5 lakhs. It should have a minimum of 200 shareholders, minimum net owned funds of Rs. 10 lakhs, and unencumbered deposits of at least 10% of the outstanding deposits. The maximum number of members in a private Nidhi company is limited to 200.
Checklist for Nidhi Company Registration:
- Minimum 7 members: A Nidhi company should have at least 7 members or shareholders to form the company.
- Minimum paid-up capital: The minimum paid-up capital required for a Nidhi company is Rs. 5 lakhs. This means that the company should have at least Rs. 5 lakhs as initial capital investment.
- Net owned funds: The net owned funds of the Nidhi company should be at least Rs. 10 lakhs. This includes the paid-up share capital and free reserves of the company.
- Name of the company: The name of the company should include the word “Nidhi Limited” as a suffix.
- Objectives: The primary objective of a Nidhi company should be to cultivate the habit of thrift and savings among its members, and to lend and borrow funds from its members.
- Registration: The Company must be registered as a public limited company with the Ministry of Corporate Affairs (MCA) under the Companies Act, 2013.
- Board of Directors: The Company must have at least 3 directors, and at least 1/3rd of the total number of directors must be independent directors.
DOCUMENTS REQUIRED
Documents required for Nidhi Company Registration
For Director/Shareholders:
- Self-attested Pan card
- Self-attested Voter id or Driving license or Passport
- Self-attested Bank statement or electricity/telephone/mobile bill
- Recent passport-size photo
For Registered address of company:
If the premise is rented/leased
- Copy of the Electricity bill of the owner
- Rent or lease agreement
- NOC from the owner of the property
If the premise is Owned
- Copy of the Electricity bill of the owner
- NOC from the owner of the property
REGISTRATION PROCESS
Process of Nidhi Company Registration
- Name Reservation
- Procurement of Digital signatures
- Preparation of Incorporation documents
- Drafting of MOA/AOA
- Filling of Incorporation documents with MCA
- Filling of Registered office
- Obtaining of License from RBI
- Filing of commencement of Business after Incorporation
- Issue of Share certificate to shareholders
WHY US
What will you get from us for Nidhi Company Registration
- Two Class 3 Digital Signatures
- 2 Director Identification Numbers
- Company Name Approval
- MOA/AOA
- Certificate of Incorporation
- Company PAN & TAN
- Company PF/ESI number
- Company Shop and Establishment Registration
- Incorporation Kit
- Hard-copy Share Certificates
- Commencement of Business Certificate
- Bank Account opening document
- Document Formats
- First auditor appointment
- Bank Account Opening
- Free Domain
- Free Website up to 5 pages
- Listing on Social media platforms
- Listing on Google My Business for nearby business
- Razor pay/Payu money payment gateway for online payment
Top Advantages to register as Nidhi Company in India
There are several advantages to registering as a Nidhi company in India. Some of these advantages include:
- Easy to form: Nidhi companies are easy to form and have a simple regulatory compliance process. This makes it a preferred choice for small business owners and entrepreneurs.
- Limited liability: As a Nidhi company is registered as a limited company, the liability of the shareholders is limited to the extent of their shareholding in the company. This ensures that the personal assets of the shareholders are not at risk in case of any liabilities of the company.
- Raising funds: Nidhi companies can raise funds from their members by issuing fixed deposits and offering loans to them. This helps in building a strong financial base for the company.
- Encourages savings: The primary objective of Nidhi companies is to encourage thrift and savings among its members. This helps in creating a culture of saving among its members.
- Low cost of borrowing: As Nidhi companies offer loans to their members at a low rate of interest, it becomes an attractive option for small business owners and individuals who are looking for low-cost borrowing options.
- No external borrowing: Nidhi companies are not allowed to borrow from external sources. This ensures that the company is not burdened with external debts and can maintain a healthy financial position.
- Exemption from certain regulations: Nidhi companies are exempted from certain regulations applicable to other non-banking financial companies (NBFCs), such as the requirement of obtaining a license from the RBI for accepting deposits.