Nidhi Company Registration
Are you gearing up to commence a finance business without investing too much capital? If your response is yes, then you must think of starting a Nidhi company.
Online Nidhi Company Registration in India Starting at just Rs. 14,999/-
It is a company classified as an NBFC (a Non-banking financing company) and registered under Section 406 of Companies Act, 2013. The main business of such a company is to facilitate lending money between the core members of the company. This way members (or shareholders) are encouraged to save money and invest them within the company. These deposits are then used by the company for its members (or shareholders), to provide loans or advances, and to acquire government-issued stocks/bonds/debentures/securities. It is regulated by the Ministry of Corporate Affairs, while the RBI monitors all its financial dealings.
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Cheaper To Borrow
As a member, one can borrow money at a minimum rate, relative to the rate at which banks lend money. This can be a major advantage in times of need, as different individuals in the mutual benefit society are likely to need funds at different points in time.
Encourages Savings
It encourages all its members to save money and encourages a thrifty lifestyle. A Nidhi Company, after all, is a mutual benefit society wherein members can lend or borrow money and accept financial aid amongst them.
Fewer Complications
Borrowing and lending to known persons, where the procedure is fixed, is much less complicated than dealing with banks or in an informal setting. A Nidhi Company enables its members to unlock the potential of their money and gain from lower interest rates when they require money themselves.
Limited Liability
A public company can enjoy unlimited sources for borrowing funds. It can issue equity, debentures and can accept the deposits from the general public by selling its shares. Moreover, most of the financial institutions find public companies more prominent than other unregistered companiesIn accordance with the Companies Act, 2013, directors and shareholders are having limited liability. In the game of business, either there will be profit or the company have to incur losses. While performing the business activities, if the company suffers from any loss or even goes through any financial trauma, creditors, banks, and the government have no power to seize the personal assets of any of the shareholders or even the directors.
High Certainty Value
In a developing nation like India, From 8 years old child to 60 Years older adult is interested in saving their money. Here, the habit of saving is going in the same line with the central goal of Nidhi Company. Inculcating the habit of saving amongst its members is one of the primary purposes of Nidhi Companies. As it is a going concern of establishment and is full of certainty, members would keep on sticking to the good habit of saving.
Few Guidelines
Being governed under the Nidhi Rules, 2014, Nidhi Companies have to follow fewer guidelines imposed by RBI. The monitoring and regulating hat remain in the hand of the Central Government. It empowers them to control the operating part along with all their activities. Even though Nidhi Company falls under the category of NBFC, it rarely follows RBI Regulations. You can definitely form your Nidhi Company in India as RBI is not going to create any trouble in your path. Go ahead without putting yourself in any rush-n-hush.
Documents Required for Nidhi Company Registration
- Digital Signatures of all Directors and Subscribers
- DIN No. for all Directors (If already allotted, otherwise it can be allotted later on)
- Identity Proofs for all the Directors and Subscribers (PAN Card)
- Address Proof of all the Directors and Subscribers (e.g. Aadhaar, Bank Statement)
- Photograph of all the Directors and Subscribers
- Any Utility Bill as Address Proof of Registered office of the company
- If Registered Office is Rented, No Objection Certificate/ Rent Deed from the owner of the Property
- Other documents as prepared by the Professional
In order to incorporate A Nidhi Company, one has to follow the procedure given by The Ministry of Corporate Affairs in accordance with The Companies Act, 2013.
Step 1: Consent of Directors and Members
Get consent of all the subscribers to become member and Director of the company who are willing to incorporate the company. The person who are becoming the Director of the company (if Individual) shall be Member of the company.
Step 2: Check the name Availability
Name of a Nidhi Company shall end with “Nidhi Limited’. For e.g. ABC Nidhi Limited. Check the name Availability for the proposed company. Rule 8 and 8A of The Companies (Incorporation) Rules, 2014 shall be abided while checking the name of the company. You will need professional expertise to check the name as there are several complexities while doing the same.
Step 3: Apply for DSC
The Digital Signature Certificates (DSC) of all the subscribers and Directors of the proposed Company shall be applied and necessary verification should be done by the applicant.
Step 4: Completion of Documentation
Set of documents need to be prepared which will be filed with the Registrar of Company, Central Registry Centre.
Step 5: Filing for Forms
Incorporation Forms such as SPICe PLUS, eMOA, eAOA, etc. will be filed with Ministry of Corporate Affairs. In the MOA the only object should be of cultivating the habit of thrift and saving amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.
Step 6: Final Approval
If all the documents filed are complete and correct in all respect then the Ministry shall approve the company and the Certificate of Incorporation along with other documents will be issued. PAN and TAN will be simultaneously generated at the time of Incorporation.
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1. Who has got the authority to regulate Nidhi Company?
Ministry of Corporate Affairs is the responsible authority for regulating Nidhi Company and is also accountable for Nidhi Company Registration. Provisions of Nidhi Rules, 2014, are being followed for doing all the activities. -
2. What requirements are to be met to become a Nidhi Company member?
To become a member of Nidhi Company, an individual should meet the following requirements
The member must be over 18 years of age.
Only an individual is eligible to become a member. No trust or any corporate body can become a member.
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3. Can Nidhi Company issue debt securities or preference shares?
No, Issuance of the following securities is not in the hand of Nidhi Company
Debentures
Preference shares
Other kinds of debt securities
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4. Can Nidhi Company perform its operations outside the state?
No, Nidhi Company cannot perform its operations outside the boundaries of the state in which the registration has taken place. -
5. Are Nidhi Companies authorized to advertise their activities?
No, Nidhi Companies cannot advertise their activities. -
6. Is there any need for office space to run a Nidhi Company?
One residential address is enough for running a Nidhi Company. There is no such requirement as office space. -
7. Can a Nidhi Company issue unsecured loans?
No, Nidhi Company cannot issue unsecured loans. However, it can issue secured loans to its members. -
8. How long does it take to register a company?
It takes almost 30-40 days for the completion of the registration process. -
9. In a Nidhi Company, are members allowed to credit or debit cash to the general fund?
No, members are only allowed to deposit, borrow, or lend funds. -
10.In a Nidhi Company, what should the limit for cash deposit be, for its representatives?
A Nidhi Company can accept deposits not exceeding 20 times of its net owned assets, as per the last audited statements.
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