Nidhi Company Registration
Nidhi Companyis a type of company which accepts deposits and lends money to its members only. Under this, profit earned by members of the Nidhi Companyis shared among themselves. Nidhi Companycan only be registered as a public limited company. It falls under the purview of Non-Bank Financial Institution or an NBFC. The main object of the Nidhi Companyis cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit. In this blog post, we will talk about the rules regarding Nidhi Companyregistration. Within one year of its incorporation, when the number of shareholder reached 200 then a separate application is filed before the ROC grant of Nidhi Company Status.
Minimum Requirements to start a Nidhi Company
A Nidhi Company can be registered in India, by 7 members. A Nidhi Company Status it need at least 200 members in a year.
- Prohibited Activities
Activities like Chit Fund, Hire-Purchase Finance, Leasing Finance, Insurance or Securities Business is strictly prohibited.
- Number of Members
It starts with 7 members as a public limited company, however, to obtain a Nidhi Company Status needs to the minimum number of shareholders must be 200 at the end of the 1st year.
- Capital Introduced
The minimum paid-up equity capital required for Nidhi CompanyStatus is Rs. 10,00,000 help by at least 200 members.
- Unique name
The Proposed name of the Name of Nidhi Companymust be unique and it should not be similar. The name can be reserved through Reserve Unique Name (RUN) facility.
Documents Required For Nidhi Company
The documentation play an important role in incorporation of company, it must be recent and eligible
Documentation of the Company & Promoters
- Two color passport size photograph of each Promoters.
- Pan card copy with self attest of each Promoters.
- Identity Proof (Voter ID / Driving License/ Passport) any one of each Promoters.
- Address Proof not older than 2 months (Bank Statement / Electricity, Mobile, Telephone Bill) any one of each Promoters.
- Signed Declaration (s) from Promoters.
Registered Address Related Documents
- Latest Proof of Registered Office not older than 2 months.
- Latest Utility Bill as Proof of Registered Address not older than 2 months.
- NOC from the owner of the premises
- If rented then Rent agreement
Nidhi Company Registration Process
Digital Signature of Director (step 1)
Digital signature (DSC) is a basic requirement to initiate the Nidhi Company Registration procedure as all the forms are submitted should be self-attested
Name Approval of Company (step 2)
The name of Nidhi Company must end with “Nidhi Limited” and must be unique and should not be the same or similar to an existing company.
Filling for Incorporation (step 3)
Once the name is approved the Nidhi Company Registration application is submitted in SPICe Form along with Nidhi company’s Articles of Association and Memorandum of Association. After proper inspection of the application, COI is issued.
Obtaining The Nidhi Company Status (step 4)
The application for Nidhi Status is filed when the net worth of the company is over Rs. 10,00,000 and the minimum no. of members are 200.
Frequently Asked Questions
Ans 1. No, unlike other NBFCs, Nidhi Company Registration and regulation is exempted from core provisions of Reserve Bank of India.
Ans. 2 Nidhi Company Registration, as well as regulation, is done by the Ministry of Corporate Affairs. All the activities are done as per the provisions of Nidhi Rules, 2014.
Ans. 3 As Nidhi Companies are not regulated by RBI, in order to ensure smooth and transparent operations of Nidhi Company central government has introduced Nidhi Rules, 2014. These rules contain the governing principles for Nidhi company operations.
Ans. 4 After Nidhi Company registration the most important part is to know that you can only accept deposits from your registered members.
Ans. 5 In order to become a member of a Nidhi company following requirements are to be met:
1. Member must be an individual, no corporate body or trust can become a member.
2. The member must have attained the age of 18 years.
Ans. 6 NO, RBI approval is not required for them. Business can be started as soon as Nidhi Company Registration process is completed.
Ans. 7 NO, Nidhi companies cannot issue following securities;
1. Preference shares
2. Debentures
3. Any other kind of Debt security
Ans. 8 For Nidhi Company loan limit is dependent upon the amount of deposits it holds. Following are specified limits:
| Deposit amount (in Rupees) | Loan Limit (in Rupees) |
|---|---|
| Less than 2 Crore | 2,00,000 |
| 2 Crore-20Crore | 7,50,000 |
| 20 Crore-50Crore | 12,00,000 |
| More than 50 Crore | 15,00,000 |
>Ans. 9 Â No, Nidhi Company cannot operate outside the state it is registered in.
Ans. 10 No, Nidhi company is neither authorized to acquire through the purchase of its securities nor does it has the power to control its management or change the composition of its management.
For any such activity previous approval from the respective Regional Director is required to be obtained after passing a special resolution in its general meeting.