Points to Focus on Nidhi Company Registration
Nidhi company registration process is very similar to a public limited company, however, the functioning of the company is different and MOA & AOA is more towards financing.
What are Basic requirements to form a Nidhi Company Registration?
At least of 3 directors and 7 shareholders are required to start Nidhi Company Registration. Precautions must be taken to make sure that the aim of Limited Company is that of saving its members, lending, and borrowing amongst its members only for their mutual benefit.
Nidhi Company Registration Process
Nidhi Company Registration process requires to comply with the Nidhi companies rules or else the application made may be rejected by the authority. In Additional, the registration process may be divided into 3 steps:
Step 1 – Prepare DSC & DIN: The first step is to file for Digital Signatures (DSC) and Director Identification Number (DIN). It takes around 1 day to get the digital signatures and generally DIN can be filed on the same day.
Step 2 – File Name Approval: The second step is to file the name approval via form INC – 1 and most of them can give maximum 6 names for approval.
Step 3 – File for incorporation: The third step is to file the incorporation along with all necessary documents via form INC 32.
If anyone who wants to Register a Nidhi Company in India, then they must look into these vital points.
7 Essential Points of Nidhi Company Registration
- Nidhi Company is registered as ‘Public Company’. The registration process is somewhat same as the public companies except for some additional steps.
- Nidhi Company must be incorporated as Public Limited Company. It needs at least 3 directors, 7 shareholders and minimum capital of Rs.10 lakh.
- The company should not issue preference shares
- A Nidhi company register in India should have ‘Nidhi Limited’ as part of its name
- The Net Owned Funds should be 10 lakhs or more
- The company should have unencumbered deposits of at least 10% of the o/s deposits
- The ratio of Net owned Funds to deposits should not exceed the ratio 1:20
Advantages of Nidhi Company Registration
- These are single office institutions have no outside interference.
- These are built to calculate a habit of saving among their respected members and works for the benefit of their depositors and borrowers.
- The deposits are much lesser than handled by other institutions of the financial sector.
- It does not require any Reserve Bank of India license.
- These accept term deposits from its members only for timely and safe returns.
- These provide easy loans to members. The repayment is limited to 1 year and 7 years, against immovable property or any jewelry as security.
- Less interest rate is charged as compared to the bank loan rates.
The Requirement After incorporation as Nidhi company;
- Minimum 200 shareholders
- The company should have unencumbered deposits of not less than 10% of the outstanding deposits
- The company must have Net Owned Funds (NOF) of 10 lakhs or even more
The ratio of Net Owned Funds to deposits should not be more than 1:20.