Nidhi Company
Easily setup a sole proprietorship with registrations, LEDGERS and business bank account.
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- Fewer legal formalities than LLP.
- Associated with the GST and income tax departments.
- Full control over the business for the sole proprietor.
- No separate business tax filings.
- Easy to disassemble.
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Nidhi Company
Easily setup a sole proprietorship with registrations, LEDGERS and business bank account.
A Guide to Nidhi Company & Registration Process
A Nidhi Company works on the principle of mutual benefits. Such a company can only borrow an amount and lend an amount from its members who also act as the shareholders. Members can access loans at better interest rates. On the one hand, such a company is governed by the Companies Act, 2013. On the other hand, it must follow the Nidhi Rules, 2014. If you are looking for Nidhi Company registration near me, this guide will help you understand the registration process, requirements, and compliance rules.
What Is Nidhi Company?
A Nidhi Company is a specific type of non-banking financial company (NBFC) established in India. It promotes savings habits among its members. Nidhi in Hindi means ‘treasure.’ Unlike regular banks, it does not require a license from the Reserve Bank of India (RBI), but RBI might oversee its activities related to the deposits.
A Nidhi Company in India has certain tax exemptions and relaxed annual compliances.. However, it must add ‘Nidhi Limited’ to its name and get registered as a public limited company. If you are searching for Nidhi Company registration near me, ensure you meet all the eligibility requirements.
What is Nidhi Company Registration Process?
Nidhi Company registration in India resembles the registration process of various other companies. However, if you are looking for Nidhi Company registration near me, you must be ready with the mandatory Nidhi Company registration documents and check the Nidhi Company compliances.
Step 1: Minimum Members and Directors
You need to have a minimum of seven members (individuals or companies) to initiate the registration process. Out of them, three should be the directors.
Step 2: Obtain DSC and DIN
All directors and members, as proposed in the Memorandum of Association (MoA), should possess Digital Signature Certificates (DSCs) and Director Identification Numbers (DINs) (only for the directors).
Step 3: Name Reservation
Submit a name reservation request through the SPICe+ RUN form on the MCA portal.
Step 4: MoA and AoA Drafting
Prepare an MoA and AoA to clarify the objectives and operational rules for your company.
Step 5: Apply for Nidhi Status
Fill out Form NDH-4 to declare your company as ‘Nidhi.’ Your application will be checked by the Central Government, and if approved, you will get the license. If rejected, your company will not be authorized to start lending and borrowing.
Step 6: Obtain Certificate of Incorporation
Once your application is approved, your company will receive a Certificate of Incorporation, marking the official registration.
Step 7: Open a Bank Account
Open a Nidhi Company bank account using the Articles of Association (AoA), MoA, and Certificate of Incorporation. Also, apply for PAN and TAN.
Documents Required for Registration of Nidhi Company
- MoA and AoA.
- DSC, identity proofs, address proofs, copies of PAN Card, passport-size photos and DIN of all members and directors
- PAN and TAN of the company.
- Address proof of the registered office.
- Ownership proof of the office and No Objection Certificate (NoC) (if required)
If you have all the required Nidhi Company registration documents, you are ready to proceed with the Nidhi Company registration online process.
Nidhi Company Rules
To avoid confusion, here are some Nidhi Company rules that set it apart from other financial institutions:
- A Nidhi Company cannot offer insurance services.
- The minimum share capital required is Rs. 5 lakhs (USD 5,976).
- No external investors or creditors are allowed.
- It cannot advertise for public deposits.
- The company must open savings accounts for its members, not current accounts.
- It can only borrow and lend money to its members.
- The company cannot act as a chit-fund, securities business, or leasing financial institution.
Nidhi Company Compliances
Annual compliance and taxation are mandatory for Nidhi Company registration. The following Nidhi Company compliances must be followed:
- Form AOC-4: Financial statements must be filed with the ROC.
- Form MGT-7: Annual return filing details.
- Form NDH-1: Statutory compliance return.
- Form NDH-2: Application for an extension of approvals.
- Form NDH-3: Half-yearly return filing.
Due to the complexity of Nidhi Company compliances, consulting a professional for Nidhi Company registration near me is recommended.
Nidhi Company Registration Fees
The Nidhi Company registration fees vary based on professional charges, government fees, and documentation costs. Typically, the Nidhi Company registration cost in India ranges between Rs. 15,000 to Rs. 25,000. Ensure you check the Nidhi Company registration charges before proceeding.
Are You Still Struggling with the Nidhi Company Registration? Here’s a Reliable Solution.
| ADVANTAGES | DISADVANTAGES |
|---|---|
|
The members develop a habit of saving. |
It does not help the outsiders. |
|
Relatively simple registration process. |
The minimum net owned fund is Rs. 20 lakhs (USD 23,905). |
|
Flexible regulations compared to banks. |
Cannot borrow from banks. |
|
It has fewer compliance requirements than banks. |
You must fill out some forms specific to the Nidhi Company. |
|
The financial needs of the members are met here. |
It has limited growth potential and cannot attract diverse members. |
Conclusion
A Nidhi Company registration near me can be easily completed online through the MCA portal. However, reaching out to an expert can simplify the process. Do not confuse Nidhi Company with chit-funds, insurance companies, or other financial structures. The Nidhi Company registration online process is simple, but compliance can be tedious. Seeking professional guidance ensures error-free registration and legal compliance.
By following the Nidhi Company registration process, you can establish a Nidhi Company in India and enjoy financial benefits. If you’re searching for Nidhi Company registration near me, ensure you understand the Nidhi Company registration requirements, fees, and compliance before proceeding.
Frequently Asked Questions
When Does a Depositor Get an Interest on the Deposit in a Nidhi Company?
The depositor gets an interest only after six months of the deposit.
What Are the Rules for Getting a Loan from a Nidhi Company?
A member’s loan depends on the total deposit amount. Loans can range from Rs. 2 lakhs (USD 2,390) to Rs. 15 lakhs (USD 17,928).
Who Imposes Regulations on the Nidhi Companies?
Nidhi Companies follow regulations set by the Reserve Bank of India (RBI) and the Companies Act, 2013.
What Are the Objectives of a Nidhi Company?
The primary objective is to promote savings and financial security among its members.
Which Act Does the Nidhi Company Follow?
Nidhi Companies follow The Companies Act, of 2013, and come under Section 406.