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Nidhi Company Registration

All about Nidhi Company Registration in 15 days, Share Certificate, Nidhi License & 2 Hours Training about operations of Nidhi company

All-Inclusive Package Rs 17,999*

  • DSC (3 DSC)
  • DIN for 2 Directors
  • Company Name Reservation (1 Run)
  • Spice Form / MOA & AOA (1 Spice)
  • Corporate Identification Number (CIN)
  • PAN & TAN
  • Bank Account Opening template
  • Free Call by CA about the Compliance requirement
  • Assistance in Nidhi Company Software

(Note – Govt. Fees Estimated as per ROC Mumbai )

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What is Nidhi Company Registration?

Planning to register a finance business but does not have much capital do not worry we have a very good option for you called Nidhi company is right feet for you. For Nidhi Company Registration, you only need collect identity & Address proofs of seven people. You can add family members and friends as Member / Director in the Nidhi company further There is no initial capital requirement as per Nidhi Rule. A Nidhi Company in India belongs to the non-banking financial sector (NBFC) and is incorporated primarily with the objective of encouraging the habit of saving and creating reserve funds amongst its members whereby the company receives deposits from its members and can lend money only to its members for mutual benefit. Nidhi Company Registration norms are less stringent. No Reserve Bank of India approval is required for Nidhi Company Registration in India.

8 Key Points to Know before You start a Nidhi Company

  • 1. Lowest Fees – You can Start Nidhi Company in Less than Rs 20,000/-
  • 2. Regulator - Companies Act 2013 & Nidhi Rule 2014 Regulates the function and operations of Nidhi company In India
  • 3. No Approval from RBI – Nidhi company is outside the preview of Reserve bank of India.
  • 4. A loan, Saving A/c & Deposit - The primary business of Nidhi is to take a deposit and lend to its shareholders-members only.
  • 5. Minimum 200 Members – within 12 months minimum 200 members should be added
  • 6. Interest on Loan – You can charge up to 20% p.a
  • 7. Branch – district level operations for initial 3 Years
  • 8. Loan Against Security – Gold, Property, FD & LIC

Nidhi Company Registration Process

  • KYC of all the Directors and Shareholders

    Minimum 7 Members and 3 Directors required. Directors and Members can be the same.

  • Digital Signature

    Digital signature (DSC is a basic requirement to initiate the Nidhi Company Registration procedure as all the forms are submitted should be self-attested

  • Name Approval

    The Proposed name of the Name of Nidhi company must be unique and it should not be similar. The name can be reserved through Reserve Unique Name (RUN) facility

  • Final Incorporation (MOA &AOA )

    Once the name is approved the Nidhi Company Registration application is submitted in SPICe Form along with Nidhi company’s Articles of Association and Memorandum of Association. After proper inspection of the application, COI is issued.

  • PAN & TAN

    PAN and TAN applications can be done along with Nidhi Company Registration as it is included in the SPICe Form.

Documents required for Nidhi Company Registration

  • Identity proof of Directors and shareholders
  • Address proof of the directors and shareholders
  • Aadhar Card of Directors and shareholders
  • Proof of registered office
  • Passport size photographs of the directors
  • NOC from the owner of the property

5 Things to know before Applying for Name Approval of the Nidhi company

The name of Nidhi Company name must be selected keeping in mind the naming guidelines provided by the MCA have been followed and it must be meaningful and relevant to the object. Following is a list of factors which must be kept in mind while selecting the Nidhi Company Name.

  • Concise & Easy

    While selecting a name for the proposed Nidhi Company it must be ensured that it is precise and has a good recall value. As complicated names are not easy to remember and thus act as a drawback.

  • Must be Unique

    There must not be any existing company or trademark registered with a same or similar name. It must neither be phonetically similar nor should it identical in any other way.

  • Relevancy

    Proposed name must be meaningful to the objects of the company, its brand value, and intentions of the promoters.

  • Suffix

    Every Nidhi Company’s name must end with ‘Nidhi Limited or Mutual benefit Nidhi Limited.

  • Must not be Offensive

    The proposed name must not include any kind of foul phrases or any other objectionable word which insults any culture, religion or group of people.

  • Must not violate any laws

    The name selection must be done as per the provisions of Emblems and Names (Prevention of Improper use) Act, 1950. And it must also not violate any other law.

Benefits of Nidhi Company Registration

If you are planning to start a finance related activity and confused id Nidhi Company Registration is the apt solution for it or not. Here we have listed out a few reasons explaining why should register a Nidhi company.

1. Separate Legal Existence

As Nidhi Company Registration is done as per the provisions of Companies Act, 2013 it has a separate legal entity as from its promoters and shareholders. Nidhi Company can acquire property on its name and also incus debts. The directors managing the company are not liable in any way.

2. Perpetual Existence

As the company has separate legal existence it is not affected by death or departure of any one or all of its shareholders. After incorporation of Nidhi Company, it will be in existence until it is legally dissolved as per the provisions of the law.

3. Management is Easier

Unlike other NBFCs which are managed by RBI to execute changes in Nidhi company is easier. Simple forms are required to be filed with MCA.

4. Credibility in market

The supervision of Nidhi Company is done by the Ministry of Corporate affairs hence it is considered more credible as compared to other similar institutions regulated by state governments.

12 Things to Know about Nidhi Rule 2014

  • 1. As per Rule 6 after successful Registration of Nidhi Company Following Activity is not allowed to:
  • 2. Carry on the business of chit fund, leasing finance or acquisition of securities
  • 3. To issue preference shares, debentures or any other debt instruments
  • 4. Open a current account with its members
  • 5. Acquire another company by purchasing securities of the company
  • 6. Carry on any other business other than borrowing and lending to its members.
  • 7. Accept deposit from a person who is not its member
  • 8. Lend or take the deposit from a corporate
  • 9. Enter into a partnership for borrowing or lending activities
  • 10. Issue advertisements for soliciting deposits
  • 11. Pledge assets of its members kept as a security
  • 12. Pay commission or incentive for mobilizing deposits.

Who are the regulator of Nidhi Company?

Nidhi Company belongs to Non-banking finance sector. Unlike other NBFCs that are registered under Companies Act, 2013 and are regulated by Reserve Bank of India, Nidhi Company has separate regulating rules by the name of Nidhi Rules, 2014.

Nidhi Company Registration is recognized by Companies Act, 2013 under Section 406. Its main area of operation is borrowing and lending business which it can do only between its registered members. Because it deals with its members and shareholders, RBI has exempted Nidhi Company Registration and operation from its core provisions. However, RBI retains its rights to issue directions for matters relating to deposit-taking activities of Nidhi Companies.

What is the Nidhi Company Registration Fee?

Nidhi Company Registration process can be completed in 10 to 15 days with the help of our expert team. All you have to do is provide all the required documents and Nidhi Company Registration Fee. A complete break-up of Nidhi Company Registration Fee is all inclusive Rs 17,999/- ROC fees estimated as per NCT of Delhi

6 Mandatory compliance for Nidhi Company

  • 1. NDH 1 - Within 60 days from the end of every financial year the Nidhi Company is required to submit the list of members as on 31-03
  • 2. NDH 2 – In case Nidhi Company is not able to add 200 members in a year then Company can request MCA for the extension.
  • 3. NDH -3Along with the above form a half yearly return is also required to be filed in Form NDH 3.
  • 4. ROC Annual Returns - Like any other registered company after Nidhi Company Registration it is also required to file an annual return with MCA through Form MGT-7.
  • 5. Profit Loss and Balance sheet - Nidhi company financials and other relevant documents are required to be submitted in Form AOC-4.
  • 6. Income tax Returns – Nidhi company is required to submit annual returns by 30-09 of following financial year

Frequently Asked Questions about Nidhi Company Registration

No, unlike other NBFCs, Nidhi Company Registration and regulation is exempted from core provisions of Reserve Bank of India.

Both such entities are different on various levels. Nidhi is not regulated by RBI and Nidhi Company Registration requires a much smaller amount of capital as compared to Rs. 2 Crore paid capital requirement for NBFCs.

Nidhi Company Registration, as well as regulation, is done by the Ministry of Corporate Affairs. All the activities are done as per the provisions of Nidhi Rules, 2014.

As Nidhi Companies are not regulated by RBI, in order to ensure smooth and transparent operations of Nidhi Company central government has introduced Nidhi Rules, 2014. These rules contain the governing principles for Nidhi company operations.

After Nidhi Company registration the most important part is to know that you can only accept deposits from your registered members.

In order to become a member of a Nidhi company following requirements are to be met:

1. Member must be an individual, no corporate body or trust can become a member.
2. The member must have attained the age of 18 years.

NO, RBI approval is not required for them. Business can be started as soon as Nidhi Company Registration process is completed.

NO. Microfinance as the term specifies is small credit facility. It is a very famous business type in semi-urban and rural areas. However, in order to conduct microfinance business RBI approval is required and can only be done any large NBFCs.

NO. Nidhi companies cannot issue following securities;

1. Preference shares
2. Debentures
3. Any other kind of Debt security

For Nidhi Company loan limit is dependent upon the amount of deposits it holds. Following are specified limits:

Deposit amount (in Rupees) Loan Limit (in Rupees)
Less than 2 Crore 2,00,000
2 Crore-20Crore 7,50,000
20 Crore-50Crore 12,00,000
More than 50 Crore 15,00,000

No. Nidhi Company cannot operate outside the state it is registered in.

Once Nidhi Company registration process is completed it is required to meet the following requirements within a year:

1. Register at least 200 members
2. Maintain minimum net owned funds of Rs. 10 Lakh.
3. Maintain net owned funds to deposit ratio of 1:20
4. Out of all the outstanding deposits, 10% must be unencumbered term deposits.

If any Nidhi company fails to meet the post-incorporation requirements within a year's time span then it must apply for an extension with Regional Director in Form NDH-2.

No, as per Nidhi companies are not authorized to promote its activities through any kind of advertisement This is done because the main object of Nidhi is to promote the habit of thrift and saving habits among its member and not to solicit deposits through promotions to non-members.

Similarly, Nidhi Company is not authorized to remit any kind of brokerage or incentive for promotion or mobilization of deposits to members or granting loans.

NO, Nidhi Company cannot purchase securities/shares of other organizations or institutions.

No. Nidhi Company is not authorized to open a current account with its members.

No, Nidhi company is neither authorized to acquire through the purchase of its securities nor does it has the power to control its management or change the composition of its management.

For any such activity previous approval from the respective Regional Director is required to be obtained after passing a special resolution in its general meeting.

Nidhi Companies are not authorized to carry on any other kind of business other than lending and borrowing on its own name.

Yes. It cannot open another branch until it has earned a net profit after tax consecutively for three straight years after successful Nidhi Company registration.

After meeting the condition of earning consecutive profits for 3 years, Nidhi Company is allowed to open 3 branches in the same district where Nidhi Company registration is done.

However, for opening any more branched either inside or outside the district boundaries prior permission from the Regional director is required.

No, Nidhi Company can only issue secured loans to its members.

Nidhi Company can issue secured loans only against following securities:

1. Goal, Silver, other precious metal and jewelry.

2. Immovable Property

3. Government securities, national saving certificates, insurance policies, Fixed Deposit receipts etc.

Nidhi Company is not allowed to issue the following type of loans:

1. Personal Loans
2. Asset/ Vehicle finance
3. Microfinance
4. Hire-purchase

Enterslice has branch office across India. As a result, we provide PAN-India services. Besides, Nidhi company registration in India is a totally online procedure. Thus, we provide Nidhi company Registration services all over India irrespective of where you want your registered office to be located at.

At Enterslice, we have a group of expert professionals like Chartered Accountants, Company Secretaries, lawyers and other industry experts who are bringing in their deep insight into the laws as well as current industry atmosphere. we ensure to solve all your queries and execute all the order with full dedication and focus.

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