Nidhi Company Registration In India

Nidhi in the Indian context / language means “TREASURE”. However, in the Indian financial sector it refers to any mutual benefit society notified by the Central / Union Government as a Nidhi Company. It is recognized under section 406 of the Companies Act 2013.It is one that belongs to the non-banking Indian finance sector.

Nidhi Company registration is simple and less complexed as compared to other types of finance companies like NBFC which require RBI license to start. A Nidhi Company can be started with an initial capital of Rs.5 lakh and require at least seven people to start with. Nidhi Company registration also require three directors initially.

But now as per new Nidhi rules at least initial capital of Rs. 20,00,000 (Rupees Twenty Lakh) to commence business of Nidhi Limited. However, you may incorporate nidihi company with capital of Rs. 500,000(Rupees Five Lakh) but after incorporation you have to increase your Net worth to commence business.

The companies doing Nidhi business are known under different names like Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company.

They are mutual benefit societies as their dealings are restricted to its members and the membership is limited. The source of funds for such a society is the contribution from its members. Loans thus given out are at reasonable rates and most of the loans are for construction of house, or repairs. Loans are generally secured

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    STEPS FOR NIDHI COMPANY REGISTRATION IN INDIA:

    1. Incorporation of the Company:

    • Obtain Digital Signature Certificate (DSC) for the proposed directors of the company.
    • Obtain Director Identification Number (DIN) for the proposed directors.
    • Choose a unique name for the company and apply for it through the Ministry of Corporate Affairs (MCA) portal.

    2. Memorandum and Articles of Association:
    Draft the Memorandum of Association (MOA) and Articles of Association (AOA) of the company.

    3. Minimum Capital Requirement:
    Ensure that the company has a minimum of 3 directors and a minimum paid-up capital as prescribed by the Companies Act.

    4.Registered Office:
    Provide details of the registered office of the company.

    5. Application for Nidhi Status:
    After the company is incorporated, an application needs to be made to the Regional Director for obtaining Nidhi status.

    6. Compliance with Nidhi Rules:
    Ensure that the company complies with the Nidhi Rules, which include maintaining a Net Owned Funds (NOF) of Rs. 10 lakhs or more, not accepting deposits exceeding 20 times of NOF, etc.

    7. Bank Account:
    Open a bank account in the name of the Nidhi Company.

    8. Filing of Documents:
    File the necessary documents with the Registrar of Companies (RoC) within the prescribed time.

    9. Commencement of Business:
    Start the business activities within one year of obtaining the Certificate of Incorporation.

    9. Certificate of Incorporation:
    Upon approval, the RoC will issue a Certificate of Incorporation.

    Note:

    The process may evolve, and it’s crucial to check for the latest regulations and requirements on the Ministry of Corporate Affairs (MCA) website or consult with a webetax professional.

    Additional Tips:

    Stay updated on changes in company law and compliance requirements. Engage with webetax professional as we are specializing in company registration for accurate guidance.

    Keep in mind that the above steps provide a general overview, and the specific requirements may vary based on the nature of your business and any updates in regulations. It’s recommended to consult with webetax professionals or legal experts for personalized guidance.

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