Nidhi Company Registration

About Nidhi Company

The word ‘Nidhi’ within the Hindu religion denotes treasure. Nidhi Companies are recognized under Section 406 of Companies Act, 2013. A Nidhi Company in India belongs to the non-banking financial sector (NBFC) and is incorporated primarily with the target of encouraging the habit of saving and creating reserve funds amongst its members whereby the corporate receives deposits from its members and may lend money only to its members for mutual benefit.

For Nidhi company doesn't require RBI Approval (RBI Circular DNBS.PD. CC.No.336/03.02.004/2013-14), Nidhi company registration is straightforward and no got to visit a office .

Enter slice may be leader in Nidhi company registration, providing services for RD, FD & Nidhi company Business plan etc. the rationale behind choosing Nidhi Company needs minimum 7 members with 5 lakhs capital for incorporation that is very low compared to start out of the other sort of NBFC of Banks and limitations of Nidhi Company is it can borrow and lend money only between its members. It inculcates the habit of saving among its members and works on the principle of mutual benefit. Nidhi Company is one among the classifications of Non-Banking Financial Company (NBFC) which doesn't require any Federal Reserve Bank of India (RBI) permit. Nidhi Company works though its individuals.

Minimum 7 people (natural) can register a Nidhi company.

For natural persons following documents are required:

  • PAN
  • AADHAR
  • EMAIL ID
  • MOBILE NUMBER
  • ANY ONE OF ELECTRICITY BILL / MOBILE BILL / TELEPHONE BILL / BANK STATEMENT MUST NOT BE OLDER THAN 2 MONTHS*
  • PASSPORT SIZE PHOTOGRAPH
  • For address proof of company:

    If owned premise: ANY ONE OF ELECTRICITY BILL / MOBILE BILL / TELEPHONE BILL MUST NOT BE OLDER THAN 2 MONTHS* ALONG WITH NOC

    If rented premise: ANY ONE OF ELECTRICITY BILL / MOBILE BILL / TELEPHONE BILL MUST NOT BE OLDER THAN 2 MONTHS* ALONG WITH NOC & RENT AGREEMENT

Minimum 3 directors are required to register a Nidhi company. At any time, if minimum number of directors falls below 2, there comes a statuary default.

As per Section 165(1) of the Act states that an individual can hold the office of director simultaneously in 20 companies. The number of 20 companies includes the office of alternate directorship. an individual can't be a director in more than 20 companies at a given time. However, the utmost number of public companies during which an individual are often a director simultaneously is 10

It can do lot of business activities, some of main business activities are as under: Saving Account

  • Fixed Deposit Account
  • Recurring Deposit Account
  • Secured Loans
  • Locker Facility etc.

No Nidhi Company shall –

    Carry on the business of chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by any body corporate;
  • Issue preference shares, debentures or any other debt instrument by any name or in any form whatsoever;
  • Open any current account with its members;
  • Acquire another company by purchase of securities 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 having jurisdiction over such Nidhi (“control” shall have the same meaning assigned to it in clause (27) of section 2 of the Act)
  • carry on any business other than the business of borrowing or lending in its own name: Provided that Nidhis which have adhered to all the provisions of these rules may provide locker facilities on rent to its members subject to the rental income from such facilities not exceeding twenty per cent of the gross income of the Nidhi at any point of time during a financial year.
    • Accept deposits from or lend to any person, other than its members
    • Pledge any of the assets lodged by its members as security
    • Take deposits from or lend money to anybody corporate
    • Enter into any partnership arrangement in its borrowing or lending activities
    • Issue or cause to be issued any advertisement in any form for soliciting deposit
    Provided that private circulation of the details of fixed deposit Schemes among the members of the Nidhi carrying the words “for private circulation to members only” shall not be considered to be an advertisement for soliciting deposits.
  • Pay any brokerage or incentive for mobilising deposits from members or for deployment of funds or for granting loans.

Yes! A natural person can be a director, a member and member & director both.

NIDHI COMPANY

Nidhi company can accept deposits and give loan to its shareholders/members only.

CREDIT CO OPERATIVE SOCITIES

Formation of cooperatives mainly for suporting farmers by extendIng subsidised credits and protect them from exploitation of money lenders.

Like at time of registration of property, We pay the stamp duty; in the same way, at time of registration of a company we have inform the capital (funds) that we may infuse for operations now or in future, accordingly decide a upper limit of investment in terms of capital. This amount of capital is called Authorized Capital & we pay stamp duty on it. It is amendable. When we increase we pay additional stamp duty. The part of Authorized capital that has been actually invested in the company is called paid-up capital.

Limited liability means suppose a member subscribed capital of Rs. 100,000/- but paid Rs. 60,000 to the company. The company meets losses & become insolvent / bankrupt. The liability of that member shall be limited to Rs. 40,000/- only be the losses of 4 crores or more or that person may have capability to fulfill the losses from his personal property.

  • Nidhi shall not accept deposits exceeding 20 times of its Net Owned Assets as per last audited financial statements
  • Fixed deposits ‐ minimum period of 6 months & maximum period of 60 months AND Recurring deposits – minimum period of 12 months & maximum period of 60 months.
  • In case of unforeseen commitments, temporary withdrawal may be permitted with the prior approval of the Regional Director for the purpose of repayment to depositors, subject to such conditions and time limit which may be specified by the Regional Director to ensure restoration of the prescribed limit of 10%.
  • Recurring deposits relating to mortgage loans ‐ maximum period of recurring deposits shall correspond to the repayment period of such loans granted by Nidhi.
  • Invest and maintain ‐ unencumbered term deposits ‐ scheduled commercial bank or post office deposits in its own name ‐ not be less than 10% of the deposits outstanding at the close of the business on the last working day of the second preceding month.
  • Maximum balance in savings deposit account ‐ shall not exceed Rs.1,00,000/‐ and interest shall not exceed 2% above the rate of interest payable to savings bank account by nationalized banks.

The Nidhi can give loans only to its members. The loan to be given shall be subject to the following limits:

TAMOUNT OF DEPOSIT TAKEN LOAN AMOUNT (INR)
Total amount of deposits from members is less than Rs. 2 crore Rs. 2,00,000
Total amount of deposits from members is more than Rs. 2 crores but less than 20 crores Rs. 7,50,000
Total amount of deposits from members is more than Rs. 20 crores but less than 50 crores Rs. 12,00,000
Total amount of deposits from members is more than Rs. 50 crores Rs. 15,00,000

The rate of interest to be charged on any loan given by a Nidhi shall not exceed 7.5% above the highest rate of interest offered on deposits by Nidhi.

Nidhi shall charge the same rate of interest on the borrowers in respect of the same class of loans. Rates of interest of all classes of loans shall be prominently displayed on the notice board at the registered office and each branch office of Nidhi.

Comparison

NIDHI COMPANY:

Nidhi Company is a non‐financial banking company which can either lend or accept deposit

CHIT FUND:

Only accept fixed Instalments over a fixed period of time which is paid by its members. They Neither do lend nor accept the amount as a whole

Documents Required:

NIDHI COMPANY:

They cannot carry the business related to chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by any body-corporate.


NBFC:

Engages in the business of loans/ advances, and acquisition of shares/stocks or other securities issued by Government or local authority, leasing, hire‐purchase, insurance business, chit business, according to its catogory of NBFC license.

NIDHI COMPANY:

  • Nidhi company can accept deposits and give loan to its shareholders/members only.
  • Nidhi Company cannot offer these facilities and current account to its members.
  • CO‐OPERATIVE BANKS
  • Can accept deposit from non-members also and can give loan to both members and non-members.
  • Can offer many services to its members like Cheque and the insurance cover from the Deposit Insurance and Credit Guarantee Corporation.
  • Can offer many services to its members like Cheque and the insurance cover from the Deposit Insurance and Credit Guarantee Corporation.

NIDHI COMPANY:

Nidhi company can accept deposits and give loan to its shareholders/members only.


CREDIT CO OPERATIVE SOCITIES:

Formation of cooperatives mainly for supporting farmers by extending subsidized credits and protect them from exploitation of money lenders.

Process of company registration

  • 1: Collection of papers
  • 2: Application of DSC (Digital Signature Certificate)
  • 3: Application for Name Approval
  • 4: Post Name Approval, Preparation of Registration documents
  • 5: Signing of documents from promoters
  • 6: Application at Government portal for registration
  • 7: Final approval of company

Post IncorporationCompliances

Filing of Form INC-20A (Intimation of Commencement of Business) within 6 months from the date of incorporation.


NDH – 1 Form (to comply nidhi rules)

Appointment of Auditor (can be appointed for maximum 5 years in one shot).

Filing of Annual Accounts & Audit of company

Filing of Return of ROC

KYC of all director’s DIN

NDH – 3 Forms.

  • Minimum of 200 members (within 1 year)
  • Net owned fund of Rs. 10,00,000 (within 1 year)
  • Unencumbered term deposit not less than 10% of o/s deposits.
  • Compulsorily filing of Annual Accounts, Audit and Tax returns

GST, Income tax & Other Laws Compliances in Nidhi Company

We all know, every land have multiple laws to collect its revenue & manage the system of nation. There are also various laws like GST Act, State Shop & Establishment Act, Income Tax Act, Custom Duty & lot more. Every law has its rules of applicability. If we fall into ambit of such law, we need to comply it in addition to the companies act, 2013.

It must obtain state shop & establishment act license otherwise district magistrate can cease the operations.

There are lot of situation, you should take GST Registration, some of those are as under:

  1. If you want to sell over e-commerce.
  2. If you want to supply out of the state.
  3. If you want to export.
  4. If supplies by you exceed the basic not taxable limit i.e. 20 lakhs for services & 40 lakhs for goods.
  5. If you are dealing in such supplies which require compulsory registration. Etc.
  6. In case of Nidhi, if your deposits exceed RS. 2000000, you should take GST Registration.

Yes, If you are not falling in such supplies which require compulsory registration.

Software Requirements

For Collection management, NDH Compliance, GST Returns preparations, financial statements preparation & roc compliance report preparations, software can be usefull.

Register your Nidhi Company in

18175.30

(including all taxes & government fees" (PAN, TAN, DIN, DSC, 15 Lakhs Authorised Capital, EPF, ESI, LIN, GST & Shielded Certificates all included) * No Hidden Charges.

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