A Complete Guide on How to Register a Nidhi Company

Nidhi companies accept deposit as well as lend loans only to its member for their mutual benefit. Nidhi Company falls under the category of Non-Banking Financial Services and does not require Reserve Bank of India license.  Nidhi companies are formed and regulated by the section 406 and Companies Act Rules, 2014.

There are some advantages of choosing Nidhi companies, and a few of them are listed below-

• Minimum documentation and formality for getting the loan are less for a Nidhi company.
• It is helpful for lower and middle-class people who are looking for the low rate of interests.
• Secured investment.
• Only the members of Nidhi Company can accept deposits as well as lend loans. This makes the procedure of lending and accepting extremely smooth as well as hassle-free.

Nidhi Company is a public limited company. The process for registering Nidhi Company is same as that of the public limited company.

Minimum requirements for Registering Nidhi Company is listed below-

• Nidhi Company requires seven shareholders. Out of these seven people, three people need to be appointed as a director. These shareholders should not be your relatives. Members do not require education qualification.
• Each company should have “Nidhi Limited” as the part of its name.
• Earlier, minimum share capital should be INR 5 Lakhs. But now, you can register to Nidhi Company with any amount of your choice. As per Rule 5 of Nidhi Rules, 2014, we recommend you to start with INR 10 lakh capital invested into it.

Documents required for Members and Registered Office

Some of the documents required for members are listed below:

• ID Proof ( Aadhar Card, Voter Id, Passport)
• Pan card
• Current Address Proof
• Passport size photo

Some of the documents required for registered office are listed below:

• If premises is for rent, you should submit Rent agreement, Utility Bill, Signed NOC
• If premises are owned, you should submit Ownership proof, Utility Bill, Signed NOC.

Requirements for Registration of Nidhi Company

Requirements to be met within a year of incorporation are listed below. These elements are very important if the requirements are not fulfilled by the registered Nidhi Company, the company will leave by default.

• Nidhi companies should have a minimum of 200 members within one year of incorporation as per the law rule. If the company does not have 200 members within one year, the company will leave by default. If your company is not able to maintain 200 members, you must apply for closure of financial year in the form NDH-2
• The minimum amount of investment in the business must be INR 10 lakhs. This requirement has to be fulfilled before the company is registered.
• The ratio of the net owned fund to deposit should be 1:20. If the amount invested in the business is INR 10 lakh, then the deposit limit should be INR 2 Crore.
• If the company fulfills all the above-mentioned conditions, the company must file a statutory compliance in a form NDH-1. And the Nidhi Company must pay requisite fees within 90 days.
• If the Nidhi Company does not meet the above-mentioned conditions at the end of the first financial year, the company must apply to the Regional Director in form NDH-2 for extension of time within 30 days.
• If a Nidhi company is not able to meet the above-mentioned conditions even after the close of the second financial year, then from the beginning of the second financial year, the Nidhi Company shall not accept any deposits.