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Nidhi Company Registration – Process & Documents required

Nidhi-Company-Registration

All you need to know about Nidhi Company Registration Online in India – Nidhi Company is a company comes under the non-banking Indian finance sector. The main objective of this company is to develop the policy of thrift and stockpile funds amongst its members. This type of company is acknowledged under section “406” of the Companies Act, 2013 and Nidhi Companies Rules, 2014. It also receives deposits and lends funds to its members under several conditions. The important aim to develop Nidhi Companies is to cultivate the habit of saving funds between the members.

The most important rule in Nidhi Companies is, it can receive and lend funds only from or to its members. They are governed by the Ministry of Corporate Affairs and Reserve Bank of India is authorized to manage the Nidhi company’s fund regulations like deposit acceptance activities and so on. Nevertheless, as these companies only receive or lend money only from or to its members, RBI has freed them from the core provisions or planning or regulations relevant on NBFC.

How to Register Nidhi Company Online in India

The actual processing time for Nidhi Company Registration is about 45 days, registration of a Nidhi Company comprises the following steps:

  • First and foremost, to register Nidhi Company or incorporated Nidhi Limited, a minimum of 7 Members and 3 Directors are required.
  • You should apply for DIN and DSC.
  • After receiving the DIN and DSC, you should file an application to MCA to reserve the name for your Nidhi Company.
  • After getting the name approval, draft the detailed Memorandum of Association (MoA) and Articles of Association (AoA). Prepare the MoA and AoA considering the Nidhi objects and all other needed documents carefully.
  • File the application for Incorporation.
  • After receiving the Incorporation Certificate, apply for TAN and PAN

The MCA or Ministry of Corporate Affairs has offered an integrated incorporation form INC-32. Therefore, the process of registration is easy and simple, as it all can be done online, yes! a Nidhi Company can be incorporated by filling the Simplified Proforma for Incorporating Company Electronically (SPICe) form through Form INC-32 with DSC or Digital Signature Certificate of the Director and with eAoA in Form INC-34 and eMoA in Form INC-33.

Requirements for Nidhi Company Online In India:

  • The name of such company must contain “Nidhi Limited”.
  • The Nidhi Company which is incorporated under this Act will be a “Public Company”.
  • The Nidhi Company should have a minimum equity share capital of about Rs. 5,00,000/.
  • There should not be any issue of preference shares / debentures by Nidhi Company. (If any such shares had been issued already by a Nidhi Company before the outset of this Act, that particular preference shares must be redeemed in conformity with the terms of issue of the shares).
  • The objective of Nidhi would be to imbibe in the members a habit of thrift and saving and the services would only be restricted to its members.

Requirements for Nidhi Company after incorporation in India

The following are the requirements that every Nidhi must possess within a period of 12 months or one year from the commencement:

  • The Nidhi Company must have a minimum of 200 members.
  • The net owned funds of the company must be Rs.10,00,000/- or more. Net owned funds is the aggregate of the paid-up equity share capital and free reserves as appears in the latest audited balance sheet.
  • The Nidhi Company must also assure that the ratio of net owned fund to deposit is more than 1:20.
  • It must be free from any impediment term deposits of more than 10% of the outstanding deposits.

If the Nidhi Company meets all the above conditions, then the Company can file NDH-1 duly certified by a Practicing CA/CS/CWA with the required fees. And it can be done within 90 days from the close of the first financial year after the incorporation. If the Company is not able to meet the above requirements, Nidhi Company can apply to the Regional Director in form NDH-2 for time extension with the required fees. And it should be done within 30 days from the close of the first financial year.

If Nidhi is not able to meet the above requirements, even after second financial year then the Nidhi Company cannot receive any funds as deposits till it abides by with the provisions, and the company will be at risk for penal consequences.

Required Documents for Nidhi Company Registration in India

The following are the needed documents for Nidhi Company registration process

  • Copy of PAN cards of all the Directors and the Shareholders of the company.
  • Copy of Identification Proof of Directors and Shareholders. It can be their Voter ID, Driving License, AADHAR ID, Passport or any Government authorized ID proof.
  • Address Proof of Directors and Shareholders, such as Bank Statement or Telephone Bill or Electricity bill or Mobile bill.
  • Passport size Photographs.
  • Property Ownership Documents or rented agreement documents of Registered office premises
  • If property is owned then Electricity bill, Ownership Documents and NOC is needed, If the property is rented then Electricity Bill, Rent Agreement and NOC are needed

Besides all the above documents, some other needed documents will be prepared by your Professional that to submit with Registrar of Companies.

Limitations on Nidhi Companies India

There are some limitations or restrictions on Nidhi Companies under Nidhi Rules, 2014. As per the Rule ‘6’ of Nidhi Rules, 2014, a Nidhi Company cannot:

  • Carry on any of the following business, 
  1. Hire Purchase finance,
  2. Chit Fund,
  3. Leasing Finance,
  4. Acquisition of Securities or Insurance provided by anybody corporate.
  • Issue any Preference Shares, debenture bond or any other debt pawn by any form or any name.
  • Any Current Account with its directors or shareholders or members.
  • Control any other company by purchase of securities in any manner or control its management until it gets approval after the Special Resolution taken in its general meeting and also after getting the prior approval from Regional Director.
  • Own any business other than borrowing and lending in its own name. Nidhi Company which has bound to all the provisos of Nidhi Rules may give locker facilities in the basis of rent to its members, but the rental income should not be more than 20% of the gross income of the company at any cost.
  • Accepting deposits from or lending fund to any corporate is restricted.
  • Any Partnership Arrangement in lending or borrowing activities is restricted.
  • Receive any deposits from or issue fund to any person, who is not in their member’s list.
  • Pledge any of the assets lodged by the members for its security.
  • Any advertisement in any form for tapping deposit is restricted by the Nidhi rules.
  • Pay any kind of incentive or brokerage for summoning deposits from members or for conceding loans or for preparation of funds are strictly prohibited in Nidhi.

You May Also Interested to Read:

  1. Benefits of starting a Nidhi Company Online in India?
  2. Nidhi Company Registration in India, Know its Restrictions & Disadvantages?

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