Nidhi Company
Nidhi Company Registration In India
“Nidhi” is a word of Hindi which means finance or fund. It is a type of non-banking financial company
incorporated and registered under the company’s act, 2013 with the main aim of borrowing and lending money to its members. It develops the habit of saving among its members and works on the principle of mutual benefit.
Minimum three directors are needed for the registration of Nidhi Company. Nidhi company registration is
very easy and it does not require RBI approval. Its registration is very economical too. All those companies
which are incorporated as Nidhi Companies must use the last word as “Nidhi Limited” as part of its name. No background check is needed for the registration of Nidhi Company. Anybody can form a Nidhi company.
What Nidhi Company Offers?
Minimum documentation and formalities
Safe and secure investments
Low rate of interest.
Useful for middle and lower classes.
No external involvement in management.
Documents Required For Nidhi Company Registration In India
Passport size photographs of directors.
Copy of Voter Id card/Aadhar card of directors.
Copy of Director’s PAN card
No objection certificate (NOC) from the landlord.
Water/Electricity Bill of the business place
Rent Agreement copy (if using rented property).
Copy of the Property papers (if property is owned by you)
Minimum Requirements For Nidhi Company Registration In India
Before Incorporation
Minimum 3 director
Minimum 7 shareholders
The director identification number (DIN) for all directors.
Minimum capital of Rs.5 lakhs
After Incorporation
Net owned funds to deposit ratio should be more than 1:20.
Minimum number of 200 shareholders
The net owned funds should not be less than Rs.10 lakhs. Free debt deposits of not less than 10% of the outstanding deposits.
Concerns Related To Nidhi Company
Nidhi Company is highly dependent on the honesty, loyalty and integrity of its members and workers.
It fulfills the needs of the small and medium income groups only.
Lackluster or Uninspiring sales promotion.
Due to lack of funds, Professional managers are not hired and nidhi companies are managed by the
amateurs.
Peoples may feel afraid in depositing funds in these companies as Nidhi companies does not require a
license from RBI.
Benefits Of Nidhi Company Registration
Minimum paid up share capital of Rs.5 Lakhs.
Ownership is easily transferred.
Tax benefits
Stamp duty is not required
Easy & economical
Privileges and Exemptions under the Companies Act, 2013.
Relaxation in compliance
Clear objectives for easy donations and loans.
Step By Step Procedure For Nidhi Company Registration
STEP: 1 APPLICATION OF DPIN AND DSC
Firstly, the partners of a Nidhi company needs to apply for DPIN and Digital signature. DPIN means the Directors PIN Number issued by the ministry of corporate aairs whereas Digital signature is an online signature used for ling. This step can be skipped, if director already owns DPIN and a Digital signature.
STEP: 2 NAME APPROVAL
Secondly, you need to suggest three dierent names to the ministry of corporate aairs for Nidhi
Company. Out of three names, only one will be selected by MCA. The suggested names must be unique
and should not match names of any other registered businesses.
STEP: 3 SUBMISSION OF MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION
After the name approval, you need to prepare Memorandum of association (MOA) and the Articles of
association (AOA). The main aim of incorporating a Nidhi company must be charity. The memorandum of
association (MOA) and the articles of association (AOA) are led to the MCA including the subscription
statement.
STEP: 4 RECEIVE THE INCORPORATION CERTIFICATE
It usually takes a time period of 15-25 days to form a Nidhi company and to get the incorporation
certificate. The certificate of incorporation certifies that the company has been created and it includes
your company identification number (CIN) too.
STEP: 5 APPLY FOR PAN, TAN And Bank
The next step is to apply for PAN and TAN. You will receive PAN and TAN within 7 working days. After that,
you have to submit the certificate of incorporation, memorandum of association, articles of association
and PAN in the bank to open your bank account.