Nidhi Company Registration
Rs. 13,999/- only
Register Company anywhere in India

WHAT IS NIDHI COMPANY ?

A Nidhi Company is a significant type of company in the Indian non-banking financial sector authorised under Section 406 of the Companies Act, 2013, whose primary activity is inter-member borrowing and lending. Permanent Fund, Benefit Funds, Quasi-Bank, Mutual Benefit Funds, and Mutual Benefit Company are additional names for Nidhi Company. They fall under the category of an Indian non-bank financial company (NBFC). Their main goals while forming the organisation were to promote reserve fund building and member savings. The business accepts deposits from its members and exclusively lends money to all of them for mutual gain.

Nidhi corporations are governed by the Nidhi Rules, 2014. As a result of its incorporation as a public limited company, they are subject to two sets of regulations: the Businesses Act of 2013’s requirements for public limited companies and the 2014’s Nidhi Rules. Within a year of incorporation, any Nidhi firm must guarantee that it has at least 200 members.

The Ministry of Corporate Affairs, which oversees them, has the authority to give them directives regarding the acceptance of deposits. Considering that these businesses solely interact with their shareholders.

The “Principle of Mutuality” is the main idea behind it. It is more common in South India, and Tamil Nadu is home to 80% of Nidhi enterprises.

PROCESS OF NIDHI COMPANY REGISTRATION

Knowing that the Nidhi company doesn’t need RBI approval makes the registration process for customers quick and easy.

The following stages are involved in registering a Nidhi company:-

  • The proposed directors of the company must apply for a digital signature (DSC). The DSC is issued by the certification agencies and the DPIN is issued by the Ministry of Corporate Affairs (MCA).

  • The e-Memorandum of Association (MoA) and e-Articles of Association (AoA) will be created and sent to the MCA using SPICe Forms when the name has been approved. The SPICe Form also includes complete information about the proposed directors and shareholders, as well as attachments with relevant paperwork.

  • Within a month, the Nidhi Company Registration will be finished, and you’ll obtain both the Registration Certificate and the Company Identity Number. The Nidhi Company’s registration with the MCA is attested to by the Certificate of Incorporation. If the directors did not previously have one, the Director Identification Number (DIN) is given to them along with the business registration.

Nidhi company establishment is easier and less complicated as compared to other finance business types like NBFC, which require an RBI licence to operate. A nidhi business can be started with Rs. 10 lakh in seed money and requires at least seven staff to get off the ground (minimum 7 members). To begin with, three directors are needed for Nidhi company registration. Each promoter or director must submit a copy of their PAN card along with proof of identity and address while applying for a nidhi corporation in India.

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REQUIREMENTS FOR NIDHI COMPANY REGISTRATION.

The Nidhi Company is one type of non-banking financial institution (NBFC). It was created so that its members may lend and borrow money. It encourages members to save money and runs on the principle of mutual benefit. The southern part of the country is where these enterprises are largely located. It is easy to establish because the Reserve Bank of India (RBI) does not require the Nidhi Company to seek a licence. As a public business, it should have “Nidhi Limited” at the end of its name. The following is a list of the requirements that must be met in order to register or operate a Nidhi Company.

Requirements Before Registration

  1. Seven is the required number of members or shareholders.
  2. Minimum number of Directors -3
  3. The minimum capital requirement is of Rs. 10 lakhs
  4. DIN for Directors
  5. A Nidhi firm that must be established in accordance with this Act must be a public corporation.
  6. No Preference Shares shall be issued.
  7. The objective of the company shall be to cultivate the habit of saving by “receiving deposits” from and “lending to” it’s members only for their mutual benefit.

Requirements After Registration

  1. By the end of the 1st year, the number of members or shareholders of the Nidhi Company must be 200 at least.

  2. NOF should be more than Rs. 10 lakhs.
  3. The ratio for NOF to Deposit should be more than 1:20.
  4. Unencumbered deposits should exceed 10 % of outstanding deposits.

Document Required for Nidhi Company Registration Online

The procedure for establishing a nidhi organisation is easy, but it is recommended to get professional guidance in order to complete complicated forms on time. It may seem difficult to comprehend the terminology used in government portals. To register, the following papers must be provided.

PAN & Photo

PAN & photo are required for each & every director & shareholder in India.

ID Proof

Anyone of the following: Aadhar card, voter ID, Driving license & passport.

Address Proof

Anyone of the following: Bank statement, Mobile bill, Electricity bill, Landline bill

Registered Office

Electricity bill/rent agreement and copy of No objection certificate

Benefits Of Nidhi Company Registration

Nidhi Company was created mainly to encourage its members to preserve money so that they could occasionally pay their debts. They acquire critical thinking abilities that enable them to become self-sufficient and be able to pay for any further costs.

There are many advantages to setting up a Nidhi firm. Among the main advantages are:

  • no external influence in the organization’s management;
  • raising capital, lending money to others, and borrowing from group members are easy;
  • easy to handle;
  • minimal monetary commitment;
  • a decline in compliance rate;
  • inexpensive registration; 
  • a safe investment with a low interest rate;
  • extremely low risk;
  • seems to have the status of a separate legal entity.
  • better financial option;
  • Nidhi Company Rules is the only authority that regulates;
  • the Credit Cooperative Society’s superior replacement;
  • possesses the status of a separate legal entity;
  • fulfilling the financial requirements of the poor and middle classes;
  • simple processing
  • simple access to public funding
  • restricting liability;
  • Certain benefits and exemptions are provided in accordance with the Companies Act of 2013
  •  RBI’s scant involvement

NIDHI COMPANY REGISTRATION FEE

Basic

For 3 Months
4,999
  • Nidhi Registration
  • Nidhi Consultancy
  • MOA/AOI AADHAR CARD KYC

Premium

In 15 Days
39,999
  • Nihi Registration
  • Nidhi Consultancy
  • MOA/AOI AADHAR CARD KYC
  • Basic Software
  • Nidhi Compliances
Popular

Advanced

In Just 2 Months
24,999
  • Nidhi Registration
  • Nidhi Consultancy
  • MOA/AOI AADHAR CARD KYC
  • Basic Software

NIDHI COMPANY COMPLIANCES AFTER REGISTRATION

Form NDH-1​

According to the form, the member list must be submitted on certain form within 90 days after the end of each financial year.​

Form NDH-2

If you are enable to reach 200 members goal and the company's requirements are not met during the first budget. ​

Form NDH-3

Half-Yearly return must also be filled on Form NDH-3 in addition to the one of the previously mentioned, the NHD-1 Form

Annual Return & ROC

Annual Return must be filled using MGT-7 in the MCA. MGT-7

Profit & Loss Statement And The Company's Balance Sheet

The financial statement and the other pertinent documentation must be submitted annually in form AOC-4

Income Tax Return (ITR)

It must submit yearly income tax return (ITR) for the applicable financial year on or before September 30th.

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FAQ'S

A Nidhi Company is a Company which carries on the business of accepting deposits and lending the same on demand. Nidhi Company is similar to NBFC but the only basic difference between the two is that Nidhi Companies accept deposits only from its members. The main aim of these companies is to work for the mutual benefit of its members. These companies are not entitled to carry on the business of Hire Purchase Financing, Insurance, Chit Funds and Acquisition of securities or Issue of any Debt Instruments.

A minimum of three directors and seven shareholders are needed for incorporating a Nidhi Company.

No, a minor is not allowed to become director of a Nidhi Company. Only a person who is a minimum of 18 years old can become the Director of a Nidhi Company.

No, there is no upper limit prescribed for the maximum number of members. However, it is mandatory for a Nidhi Company must have a minimum of two hundred members by the end of the 1st financial year.

No, all the financial transactions have to be made only between the shareholders of the company.

No, Nidhi Company is not allowed to do microfinance business in India. These are because micro finance is a completely different set of business for an NBFC and require more capital to do the same. Hence, Nidhi Company cannot engage itself into micro finance business. Further, since Nidhi Company raise fund from deposits and hence, if it passes the same to member without any security, then there will be great chances of customer default which will ultimately results into bankruptcy of the Nidhi Company.

A Nidhi Company can open up to 3 branches after three years of continuous profit running of the business. Further, these three branches can be opened within the district only. Further, to open any branch outside the district, you will require the Regional Director (RD) permission. Also, a Nidhi Company cannot open a branch outside the state.

Yes, the Deposits with such companies are safe and secure because the Ministry of Corporate Affairs and Reserve Bank of India has framed rules and regulations to ensure the safety and security of Deposits. And the Nidhi Company compulsorily abide by the rules of Central Government.

Any person who is above 18 years of age as per the standard age proof can become a member of the Nidhi Companies. The person desirous of becoming a member should have valid ID Proof and Address Proof.

Nidhi can provide loans to its members only after the members have given/ provided some securities like gold, silver jewelry or any type of financial securities against the loan.

Yes, it is necessary to use the word “Nidhi Limited” in the name of the company. However, the term “Mutual Benefit” can also be used.

The regulations passed by the Ministry of Corporate Affairs and the provision of Nidhi Rules, 2014 act as the regulating authority for Nidhi Company.

A Certificate of Incorporation has lifetime validity, or till the time the company’s name is not struck off by the ROC (Registrar of Companies).

No, Nidhi Company is not qualified to issue unsecured loans. However, it can issue Secured Loans to its shareholders or members.

No, a person cannot borrow again from the Nidhi Company if he has earlier defaulted in a loan.

No, a Nidhi Company is not allowed to operate outside the state in which it is registered.

No, the profits earned from a Nidhi Company cannot be invested in any other business.

A minimum of 6 months and a maximum of 60 months period is prescribed for fixed deposits in a Nidhi Company.

A Nidhi Company can accept deposits only from its Registered Members.

A minimum of 12 months and a maximum of 60 months period is prescribed for recurring deposits in a Nidhi Company.

No, Nidhi Companies are exempted from the core NBFC provisions of the Reserve Bank of India.

A Nidhi Company is not regulated and governed by the provisions of RBI. Moreover, Nidhi Company Registration requires a much smaller amount of capital than Rs 2 Crore paid-up capital requirement for NBFCs.

A Nidhi Company is not regulated and governed by the provisions of RBI. Moreover, Nidhi Company Registration requires a much smaller amount of capital than Rs 2 Crore paid-up capital requirement for NBFCs.

No, a Nidhi Company cannot purchase securities and shares from any other organization.

No, a Nidhi Company cannot purchase securities and shares from any other organization.

No, a Nidhi Company is not allowed to carry out any activity other than Lending and Borrowing.

A director of Nidhi Company can hold their office for 10 consecutive years. However, he is eligible for re-appointment only after the expiry of 2 years, starting from the cessation of his term.

Nidhi Company cannot accept deposits exceeding the limit of twenty times its NOF (Net Owned Funds).

A Nidhi Company is allowed to open only three branches within a district. However, to open more than three branches, the said Company is must seek prior approval of the RD (Regional Director) for every additional branch.

A Director is firstly required to be a member of the said Company, and then, he must comply with the requirements prescribed under Section 152(4) of the Companies Act, 2013.

No, a Body Corporate is not allowed to be admitted as a member or shareholder of a Nidhi Company.

A Nidhi company must be incorporated under the provisions of the Companies Act, 2013, and shall acquire the status of a Public Limited Company.

No, such rules have been prescribed banning a salaried person from becoming a director of a Nidhi Company. However, the employment agreement of the said person may place some restrictions on him or herein doing so.

A Nidhi company cannot be converted into NBFC.

No, Nidhi Company cannot give a vehicle loan

A Nidhi Company is a company that carries on the business of accepting deposits and lending the same on demand. Nidhi Company is similar to NBFC, but the only basic difference is that Nidhi Companies accept deposits only from its members.

Nidhi can deal only in secured loans. Thus it can give loans against the securities mentioned in the law.

The term NOF is the acronym form for the Net Owned Funds. Further, NOF or the Net Owned Fund = Aggregate Paid up share capital + Free Reserves – Accumulated losses (Deferred Revenue Expenditure), and Other Intangible Assets appearing in the Last Audited Balance Sheet.