Nidhi Company Registration
Starting from ₹7,000 + GST
;
Table Of Content
Nidhi Company Registration Made Easy
A Nidhi Company registration is a type of Non-Banking Financial Company (NBFC) incorporated and registered under Section 406 of the Companies Act 2013. The main aim of this form of company registration is to borrow and lend money to its core members. It is governed by the Central Government and encourages the habit of saving among its members, working on the principle of mutual benefit.
All lending and borrowing activities must comply with the rules laid down in Chapter XXIV of the Company Rules 2014. Nidhi Companies do not require a license from the RBI, making them easy to form. Examples of Nidhi Company registrations include mutual benefit companies, mutual benefit funds, permanent funds, etc.
Since Nidhi Companies fall under the NBFC category, the RBI can issue directions regarding their deposit acceptance activities. However, considering that these companies deal exclusively with their members, the RBI has exempted notified Nidhi Companies from the core provisions of the RBI Act and other directions applicable to NBFCs.
Benefits of Nidhi Company Registration
Less Compliance
Nidhi Companies, by their nature of activity, fall under the category of NBFCs but do not require RBI approval. The RBI has exempted Nidhi Companies from stringent compliance requirements, so you don’t need to worry about the regulations to be followed.
The registration of a Nidhi Company is very economical for the applicant, with a minimum capital requirement of Rs. 5,00,000. You have the opportunity to invest the capital within two months after registration.
Low Risk
A Nidhi company can accept deposits and lend money to its members only, which means the risk of non-repayment of loans is very low compared to other financial businesses. It is the safest route for lending money, and the loans given to members are at much lower rates than others, promoting greater savings among members.
Net Owned Funds
Net owned funds refer to the amount of capital invested by the owner in the business to raise funds. The net owned fund ratio of a Nidhi Company is 1:20, which means you can invest one rupee and raise a deposit of twenty rupees.
Encouraging Savings Habits
A Nidhi Company encourages all its members to save money and promotes an economical lifestyle. It operates as a mutual benefit company where members can lend or borrow money and access financial assistance among themselves.
Eligibility For Nidhi Company Registration
Process for Nidhi Company Registration
Step 1
Application for Name Approval
- Submit two proposed names for the company along with the objective/purpose of business activity and statutory fees to the Ministry of Corporate Affairs (MCA).
- Ensure the names are unique and do not contain punctuation marks. Upon approval, the name is valid for 20 days.
Step 2
Digital Signature Certificate Application
- Apply for DSCs for all directors and shareholders of the Nidhi Company.
- This is a crucial step for filing documents online and can be done concurrently with the name approval application.
Step 3
Documents Preparation and Form Submission
- Prepare and file various forms required for incorporation, such as Spice + Part, Agile Pro, Spice MOA, Spice AOA, and INC 9 forms with the MCA.
- These forms contain information about the company’s registered office, authorized capital, shareholding pattern, directors, shareholders, and other details.
Step 4
Obtain Incorporation Certificate
- After submitting the documents and verification by the Registrar of Companies (ROC), you will receive the Certificate of Incorporation within 7-15 working days.
- This certificate acts as the company’s birth certificate and includes details such as the company name, registered address, Corporate Identity Number (CIN), and other relevant information.
Step 5
Bank Account Opening
- Open a bank account in the company’s name and deposit the proposed paid-up capital.
- Submit the incorporation certificate, Memorandum of Association (MOA), Articles of Association (AOA), and other necessary documents to the bank.
- File INC-20A within 180 days since incorporation into the MCA to obtain the certificate of commencement, allowing the company to begin its operations.
Documents required for Nidhi Company Registration
For each Directors and Shareholders
For Address Proof of the new company
Additional Requirements For Foreign Nationals
Passport *
FAQs
What is a Nidhi Company?
A Nidhi Company is a type of non-banking financial company (NBFC) that primarily deals with borrowing and lending money among its members, promoting savings habits.
Who can form a Nidhi Company?
Any individual or group of individuals can form a Nidhi Company, provided they meet the prescribed eligibility criteria and follow the registration process.
What are the minimum capital requirements for Nidhi Company registration?
The minimum capital requirement for registering a Nidhi Company is Rs. 5,00,000, and this capital must be invested within two months of registration.
Is RBI approval required for Nidhi Company registration?
No, Nidhi Companies do not require approval from the Reserve Bank of India (RBI) for registration, making the process relatively simpler compared to other types of NBFCs.
What are the compliance requirements for Nidhi Companies?
Nidhi Companies are subject to less stringent compliance requirements compared to other NBFCs. They must comply with the rules outlined in Chapter XXIV of the Company Rules 2014.
Can a Nidhi Company accept deposits from the public?
No, Nidhi Companies can only accept deposits and provide loans to their members. They are not allowed to accept deposits from the public.
How long does it take to register a Nidhi Company?
The registration process for a Nidhi Company typically takes 7-12 days on average, subject to government processing time and document submission.
What are the benefits of registering as a Nidhi Company?
Some benefits include lower compliance requirements, exemption from RBI regulations, encouragement of savings habits among members, and easier access to funds for lending activities.
Can a Nidhi Company operate nationwide?
Yes, once registered, a Nidhi Company can operate and conduct its activities across India, subject to compliance with regulatory guidelines.
What are the key documents required for Nidhi Company registration?
The key documents include identity proof, address proof, PAN card, bank statements, MOA and AOA, DSCs of directors, and other relevant documents as per regulatory requirements.