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Nidhi Company
Nidhi Company Registration
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A Nidhi Company is a type of Non-Banking Financial Company (NBFC) in India that promotes thrift and savings among its members. These mutual benefit societies allow members to save and lend money within the group for productive purposes. Derived from the word "Nidhi," meaning "treasure," these companies operate under the Companies Act, 2013, and are regulated by the Ministry of Corporate Affairs.

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Nidhi Company

A Nidhi Company is incorporated with the primary objective of cultivating savings habits among its members for their mutual benefit. It operates exclusively among its members, allowing them to contribute funds and participate in lending activities. A minimum of three members is required for registration, and the company must end its name with ‘Nidhi Limited’. It functions as a public company.

Regulatory Classification and Operations:

Nidhi Companies are categorized as Non-Banking Financial Companies (NBFCs), and they are subject to regulatory oversight by the Reserve Bank of India (RBI). The RBI issues specific directives governing their operations.

Scope and Purpose:

These entities are ideally suited for groups with focused deposit and lending activities. Nidhi Companies are exempted by the RBI Act and are relatively straightforward and economical to establish.

Utilization of Funds:

Funds mobilized by Nidhi Companies are primarily deployed for lending to members, with a focus on promoting small-scale industries, facilitating home ownership, and supporting other productive endeavours.

Financial Offerings:

Interest rates offered by Nidhi Companies tend to be competitive, typically lower than those charged by traditional financial institutions, thereby appealing to small borrowers.

Business Limitations:

Nidhi Companies are restricted from engaging in any activities beyond borrowing and lending among their members.
This framework ensures that Nidhi Companies serve as specialized entities fostering financial cooperation and support within defined member communities, under the regulatory purview of the RBI.

Nidhi Company Registration Process

Step 1: Obtaining Digital Signature Certificate (DSC) and Director Identification Number (DIN):

The proposed Directors of the Private Limited Company must obtain Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) to file registration documents. This involves providing necessary scanned documents and details, which our representatives will complete and submit online. DIN and DSC can typically be obtained within 1 to 2 days.

Step 2: Name Approval:

Submit a list of two proposed names to the Ministry of Corporate Affairs (MCA). Subject to availability, adherence to naming guidelines, and MCA processing timelines, Name Approval can be secured within 2 to 3 working days.

Step 3: Drafting MOA and AOA Electronically:

Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) electronically using Spice MOA (INC-33) and Spice AOA (INC-34). This process generally takes 2 to 3 days.

Step 4: Company Registration:

Upon completion of e-MOA and e-AOA drafting, submit the incorporation application via Spice Form INC-32 along with linked forms Spice MOA (INC-33) and Spice AOA (INC-34) to the MCA. The MCA typically processes the incorporation application within 5 to 7 days, subject to their operational timelines. Note that forms 49A (PAN application) and 49B (TAN application) must be filed mandatorily with SPICe (INC-32). Failure to do so within 2 days of SPICe (INC-32) submission will result in the incorporation application being marked as ‘Invalid’.
This structured process ensures compliance with legal requirements and facilitates the efficient registration of a Private Limited Company under the auspices of the Ministry of Corporate Affairs.

Documents Required for Nidhi Company Registration

Copy of PAN Card of Directors

Provide a copy of the PAN card of all directors involved in the company.

Passport Size Photograph of Directors

Submit passport size photographs of each director participating in the company.

Proof of Identity

Furnish a copy of either Aadhaar Card or Voter Identity Card of the directors.

Proof of Registered office

If the office premises are rented:
Copy of the Rent Agreement.
Copy of an Electricity or Water bill in the name of the business location.
Landlord NOC (No Objection Certificate) in the prescribed format, as provided.
If the office premises are owned:
Copy of Property Papers demonstrating ownership.
These documents are essential for the registration of the company and ensure compliance with regulatory requirements under the applicable laws and guidelines of the Ministry of Corporate Affairs (MCA).

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Nidhi Company FAQ's
What is a Nidhi Company?
A Nidhi Company is a type of non-banking financial company (NBFC) in India, formed for the purpose of mutual benefit. It is involved in promoting savings and lending activities among its members, primarily in the form of loans and deposits.
What is the purpose of a Nidhi Company?
The primary objective of a Nidhi Company is to encourage savings and provide low-interest loans to its members. Nidhi Companies operate on the principle of mutual benefit, where the members contribute funds and also borrow from the company at reasonable interest rates.
Who can form a Nidhi Company?
A Nidhi Company can be formed by a group of at least seven members, who are Indian citizens, and must be registered as a public company under the Companies Act, 2013. These members must adhere to the specific objectives of promoting thrift and savings among its members. The company should also have a minimum of three directors.
What are the eligibility criteria for Nidhi Company registration?
To register a Nidhi Company, the organization must have at least seven members and three directors, all of whom must be Indian citizens. It must be registered as a public company under the Companies Act, 2013, with the primary objective of promoting thrift and savings among its members. Additionally, the company must have a minimum net owned fund of ₹10 lakh and cannot engage in business activities outside its core function of facilitating savings and lending among members. The Nidhi Company must adhere strictly to these guidelines to ensure compliance and maintain its registration.
Is Nidhi Company a Non-Banking Financial Company (NBFC)?
Yes, a Nidhi Company is a type of Non-Banking Financial Company (NBFC), but it is specifically focused on promoting thrift and savings among its members. Unlike other NBFCs, which can offer a wide range of financial services, a Nidhi Company can only lend and borrow from its members, and its activities are limited to savings and loaning within its community. It operates under different regulatory guidelines and is governed by the Ministry of Corporate Affairs rather than the Reserve Bank of India (RBI).
What is the minimum capital required for Nidhi Company registration?
The minimum capital required for Nidhi Company registration is ₹10 lakh in net owned funds. This ensures that the company has enough financial resources to operate and meet regulatory requirements. The capital must be maintained as part of the company's initial funds and is a key eligibility criterion for registration.
How many directors are required for a Nidhi Company?
A Nidhi Company must have at least 3 directors.
What is the license required for a Nidhi Company?
A Nidhi Company must obtain a Nidhi Company License from the Ministry of Corporate Affairs (MCA) after its incorporation. This license allows the company to accept deposits and lend money to its members legally.
Can a Nidhi Company raise funds from outside members?
No, a Nidhi Company can only accept deposits from its members and cannot accept funds from the general public or non-members. It is strictly a member-driven financial institution.
What is the process of closing a Nidhi Company?
Closing a Nidhi Company involves a series of legal steps, including passing a resolution by the board of directors and obtaining approval from the members. The company must apply for a voluntary winding-up through the Ministry of Corporate Affairs (MCA), which includes settling any outstanding debts and liabilities, submitting a final financial statement, and appointing a liquidator to dissolve the company. The company must also file necessary documents and approvals with the Registrar of Companies (RoC) to complete the winding-up process.
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