Nidhi Company Registration

Rs. 34847/-

Nidhi Company Registration with Auth. Capital of 10 lacs

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    What is a Nidhi Company?

    As per the definition given under the Companies Act, 2013, “Nidhi” means a company which has been incorporated as a nidhi with the object of cultivating the habit of thrift and saving amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and which complies with the rules made by the central Government for regulation of such class of companies.

    How to register a Nidhi Company?

    You can easily register your Nidhi Company with help of Ofin. The process is summed up in four easy steps as below:

    • On receiving your request to start the company, we get in touch with you and collect necessary details and documents.
    • We file a request for name reservation with the Ministry of Corporate Affairs (MCA) and simultaneously get your Class III Digital Signature Certificate(s).
    • On receiving confirmation of name reservation, we apply for incorporation within 3 to 5 working days, if all the received documents are in order. MCA generally takes between 2 to 5 working days to approve the incorporation application if there is no further document(s) requirement.

    How much does it cost to start a Private Limited Company in India?

    Packages

    Nidhi Company Registration

    Rs.34847/-
    • 7 Class III DSCs with 2 years validity
    • 3 DIN Applications
    • Company Name Approval
    • Stamp Duty on Auth. Capital of Rs. 10 lacs
    • Company PAN & TAN
    • Incorporation Master File
    • Detailed proposal will be sent by email
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    Checklist for Nidhi Company Registration

    Below mentioned documents are required for Incorporation of Nidhi Company:-

    Below mentioned are the basic details and documents required to incorporation of Nidhi Company:

    1. Proposed Names: The Name for the proposed Company shall be unique and shall end with “Nidhi Limited”.
    2. Category of Nidhi Company shall be public and limited by shares.
    3. Object of the proposed company: The object of the Nidhi Company shall be cultivating the habit of thrift and savings amongst its members, receiving deposits from members, and lending to its members, only, for their mutual benefit. No other objects other than this allowed to a Nidhi Company.
    4. Shareholders and Directors: For formation of Nidhi Company, minimum seven members and out of them three shall be the directors and members. The company is required to have minimum of two hundred members within one year of its incorporation.
    5. Authorised and paid up share capital: The Nidhi Company shall have minimum paid up capital of rupee five lakhs only. However a nidhi company is required to maintain a net owned fund of rupee ten lakhs, therefore it is advisable to incorporate a Nidhi Company with an authorised and paid up capital of rupee ten lakhs.
    6. Registered office address: This is necessary for receiving all the communication and undertaking business activities. Below mentioned are the documents that can be provided as registered office address proof:

    i)Electricity Bill/Mobile Bill/Telephone Bill and

    ii)No objection letter/Certificate from the owner/legal occupant of the premises

    Object of the Nidhi Company

    The object of the Nidhi Company shall be cultivating the habit of thrift and savings amongst its members, receiving deposits from members, and lending to its members, only, for their mutual benefit. No other objects other than this allowed to a Nidhi Company.

    Branches or collection centers or offices or deposit centers

    A Nidhi Company can function only in the State where its registered office is situated. It can open and operates branches within the district of its registered office maximum up to three. For opening more branches or outside the district prior permission of the Regional Director is necessary.

    Advantage of the Nidhi Company

    1. Nidhi Companies are not required to register itself as Non-Banking Financial Company (NBFC) with Reserve Bank of India (RBI).
    2. These Companies enjoy exemption from core provisions of the RBI Act such as maintenance of liquid assets and creation of reserve fund, and RBI Directions.
    3. The minimum paid up capital required for formation of Nidhi Company as compared to Non-Banking Financial Company is less.
    4. Less compliances as compared to Non-Banking Financial Company.
    5. Nidhi Company can accept deposit from its members easily and lend the money to them.
    6. Nidhi Companies are separate legal entity.
    7. Less time required for formation of Nidhi Company as compared to Non-Banking Financial Company (NBFC).

    General Restrictions or Prohibitions on Nidhi Company

    Nidhi Company shall not:

    1. Carry on the business of chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by anybody corporate;
    2. Admit a body corporate or trust as a member;
    3. Admit a minor as a member of Nidhi;
    4. Issue preference shares, debentures or any other securities or debt instruments.;
    5. Open any current account with its members;
    6. Purchase or acquire the securities of any other company or control the composition of the Board of Directors of any other company in any manner whatsoever or enter into any arrangement for the change of its management, unless it has passed a special resolution in its general meeting and also obtained the previous approval of the Regional Director;
    7. Carry on any other business other than borrowings or lending in its own name;
    8. Accept deposits or lend to any other person other than its members;
    9. Take deposits from or lend money to anybody corporate;
    10. Pledge any of the assets lodged by its members as security,
    11. Enter into any partnership arrangement in its borrowing or lending activities;
    12. Issue or cause to be issued any advertisement in any form for soliciting deposit;
    13. Pay any brokerage or incentive for mobilizing deposits from members or for deployment of funds or for granting loans;

    Pre-requisites for Incorporating a Nidhi Company

    1. A Nidhi company shall be a public company by its nature.
    2. The directors of the Nidhi Company shallalso be member of the Nidhi Company. Minimum three directors are required for Nidhi Company.
    3. The Nidhi Company shall have minimum seven members on its incorporation, however within one year from the date of incorporation the number of members shall be two hundreds or more.
    4. The company shall have minimum paid up equity share capital of five lakh rupees.
    5. Every Nidhi company shall maintained Net owned funds of ten lakh rupees or more.
    6. The object of the Nidhi Company shall be cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.
    7. The last word in the name of every Nidhi Company shall be “Nidhi Limited.”
    8. Shall file an application for declaration as Nidhi Company or updating the status as NIdhi Company to the central government after its incorporation.
    9. Nidhi Company shall issue fully paid equity shares of the nominal value of rupee ten each.
    10. Nidhi Company shall allot to each deposit holder at least ten minimum equity shares of rupee.

    Post incorporation compliances of a Nidhi Company

    1. Number of Members: Every Nidhi Company shall have minimum 200 members within one year of its incorporation in case not incorporated with 200 members.
    2. Net Owned Funds: Every Nidhi Company shall maintained net owned fundsof rupee 10
    3. Commencement of business: Every Nidhi Company shall file form INC-20A for commencement of business within 180 days from the date of incorporation.
    4. Appointment of statutory auditor: Every Nidhi Company shall appoint the statutory auditor and file form ADT-1 for giving intimation of appointment of auditor.
    5. Form NDH-1: Every Nidhi company shall within ninety days from the close of the first financial year after its incorporation, or in second year file a return of statutory compliances of below mentioned requirements:

    (a) not less than two hundred members;

    (b) Net Owned Funds of ten lakh rupees or more;

    (c) unencumbered term deposits of not less than ten per cent of the outstanding deposits as specified in rule 14; and

    (d) ratio of Net Owned Funds to deposits of not more than 1:20.

    1. Form NDH-2: In case a Nidhi company is not able fulfill the below mentioned requirements, within one year of its incorporation, then the Nidhi Company is required to file an application for extension of time to the Regional Director in form NDH-2:

    (a) not less than two hundred members;

    (d) ratio of Net Owned Funds to deposits of not more than 1:20.

    1. Form NDH-3: A Half Yearly Return in form Form NDH-3, to be filed within thirty days from the conclusion of each half year.
    2. FORM NDH-4: A declaration as Nidhi Company is required to be filed in form NDH-4, within 60 days from the of expiry of one year from the date of its incorporation or the period up to which extension of time has been granted by the Regional Director
    3. Annual General Meeting and Annual filings: Every Nidhi Company shall file its financial statements and annual return with Registrar of Companies annually in form AOC-4 and MGT-7.

    Frequently Asked Questions

    What is Nidhi Company and how it works?

    “Nidhi” company means a company which has been incorporated as a nidhi with the object of cultivating the habit of thrift and saving amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit. It works for the benefits for its members.

    Who can start Nidhi Company?

    Individuals fulfilling following criteria can start or register a Nidhi Company:

    1. Paid up Capital of Rupee 5 lakhs or more.
    2. Minimum 3 directors who are its shareholders as well.
    3. Minimum of 7 members but within one year of its registration it shall have minimum 200 members.
    4. Object of the company shall be cultivating the habit of thrift and saving amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit. It works for the benefits for its members.
    5. Can maintain minimum net owned fund of rupee ten lakhs after incorporation.

    Is Nidhi Company legal in India?

    Yes, Nidhi Companies are separate legal entity. One can register a Nidhi Company under the Companies Act, 2013. The Central Government of India may, by notification in the Official Gazette, declare a company as Nidhi Company. The Central Government made the rules and regulation for Nidhi Companies.

    Is Nidhi Company under RBI?

    RBI has classified Nidhi companies as Mutual Benefit Financial Company and these Companies enjoy exemption from core provisions of the RBI Act that is requirement of registration, maintenance of liquid assets and creation of reserve fund, and RBI Directions except those relating to interest rate on deposits, prohibition from paying brokerage on deposits.

    How many branches can a Nidhi Company have?

    A Nidhi Company can operates in its district only and can have only three branches in that district in case it has earned net profits after tax continuously during the preceding three financial years.

    If a Nidhi proposes to open more than three branches within the district or any branch outside the district, it shall obtain the prior permission of the Regional Director and an intimation is to be given to the Registrar about opening of every branch within thirty days of such opening.

    Can Nidhi Company open branches in India?

    No Nidhi Company shall open branches or collection centers or offices or deposit centersoutside the State where its registered office is situated.  Therefore a Nidhi Company cannot open branches all over India.

    Can Nidhi Company issue shares?

    Nidhi Company can issue equity shares to its members only. A Part from equity shares a Nidhi Company can not issue any other type of securities or debts instruments.

    Can Nidhi Company give unsecured loans?

    A Nidhi company shall give loan to its members only against the securities. Therefore a Nidhi Company cannot provide unsecured loans to its members.

    Can Nidhi Company use bank word?

    No, the word Bank cannot be used in the name of Nidhi Company.

    Who can be a member of Nidhi Company?

    Any individual can become member of a Nidhi Company, however a minor or a body corporate cannot become member in a Nidhi Company.

    How many directors should Nidhi Company have?

    Nidhi Company is a type of public company and shall have minimum three directors, who shall also be members of the Nidhi Company.

    What is the minimum net owned fund of Nidhi Company?

    A Nidhi Company shall maintain minimum net owned fund of rupee 10 lakhs all the time.

    Is Nidhi Company public or private?

    A Nidhi Company is a type of public company registered with the object of cultivating the habit of thrift and saving amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit. It works for the benefits for its members.

    Can Nidhi Company invest in shares?

    Nidhi Company cannot invest into the shares or securities of other body corporates.

    What is the Annual Compliance of a Nidhi Company?

    1. Commencement of business: After incorporation Nidhi Company shall file form INC-20A for commencement of business.
    2. Appointment of statutory auditor: Every Nidhi Company shall appoint a statutory auditor and intimate the appointment of auditor to Registrar of Companies in form ADT-1.
    3. Annual filings: Every Nidhi Company shall hold annualgeneral meeting every year and shall file its financial statements and annual return in form AOC-4 and MGT-7 respectively.
    4. Form NDH-1: Every Nidhi company shall within ninety days from the close of the first financial year after its incorporation, or in second year file a return of statutory compliances.
    5. Form NDH-2: In case a Nidhi company is not able fulfill the requirements, of having two hundred members and ratio of Net Owned Funds to deposits of not more than 1:20, within one year of its incorporation, then the Nidhi Company is required to file an application for extension of time to the Regional Director in form NDH-2.
    6. Form NDH-3: A Half Yearly Return in form Form NDH-3, to be filed within thirty days from the conclusion of each half year.
    7. FORM NDH-4: A declaration as Nidhi Company is required to be filed in form NDH-4, within 60 days from the of expiry of one year from the date of its incorporation or the period up to which extension of time has been granted by the Regional Director.

    Can Nidhi Company invest in another company?

    No, Nidhi Company cannot invest in to the shares or securities or debt instruments of another company.

    Is DSC required for DIN?

    DIN stands for director Identification Number and every person wants to become a director in a company shall obtain the same. For obtaining the DIN, one has to make an application to the central government in an electronic form called DIR-3. This form DIR-3 is required to be signed digitally by the person himself/herself along with the director of the company in which he or she is proposed to be appointed. For signing the form digitally one has to acquire DSC. DSC is basically a digital signature of a person just like a physical sign.

    Is Nidhi Company safe?

    Nidhi Company are registered under the Companies Act, 2013 and theCentral Government of India may, by notification in the Official Gazette, declare a company as Nidhi Company.

    How do Nidhi Companies audit?

    Just like other type of company, Nidhi Companies are also required to appoint statutory auditor for conducting the audit. No Nidhi company shall appoint or re-appoint an individual as auditor for more than one term of five consecutive years.

    Where can Nidhi Company invest?

    A Nidhi Company shall invest in Un-encumbered Term Deposits with a scheduled commercial bank (other than a co-operative bank or a regional rural bank), or post office deposits in its own name an amount which shall not be less than ten percent of the deposits outstanding at the close of business on the last working day of the second preceding month.

    Is Nidhi Company a Section 8 company?

    Though the main purpose of Nidhi Company is to cultivating the habit of thrift and saving amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, but it is not a section 8 Company.