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Incorporation of Nidhi Company

31950* Basic Package

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Overview

Nidhi Company Registration 

Nidhi companies are usually the companies in Indian Non-banking financial sector that borrows and lends money between its members. It is a type of company that is recognized under section 406, company Act 2013. The core functions of Nidhi companies are to cultivate the habit of thrift among its own members. Hence it is also known for pursuing the habit of savings among a known group of people. 

Basics of Nidhi Company

Basically, Nidhi Companies are private limited companies that take deposits and lend to their members. The process of lending and burrowing limits within the ecosystem of its members. That is what promotes the habit of savings among the group. Being similar to a non-banking financial sector, all the activities of a Nidhi Company falls under the preview of Reserve Bank of India. However, the only difference is Nidhi Companies deals with the money of its own member. So, RBI has exempted Nidhi Companies from the core provisions of RBI that are applicable for an NBFC. 

Restrictions of a Nidhi Company

As RBI has exempted Nidhi Companies from the core provisions of RBI that are applicable for NBFC, there are various restrictions made for Nidhi Companies. Under Nidhi rules 2014, as of rule number 6 of Nidhi Rules: 

1) A Nidhi company shall not carry any kind of chit fund business; neither can they hire, nor lease finances, insurances, or securities by any of the body corporates.

2) They cannot issue preferences shares, debentures, or any debt information by any name or in any form.

3) The Nidhi Companies cannot open any current account with any of its members.

4) They also cannot acquire any companies by purchasing their securities; neither can they control the board of directors in any way.

5) Nidhi Companies cannot even enter into arrangements for changes of company's management unless and until the company has passed a special resolution in any meeting with the approval of their regional directors, those who have jurisdiction over Nidhi.

6) The Nidhi Companies cannot even carry any other business in their own name other than lending and burrowing; provided Nidhi companies that have adhered all provision under these rules may provide a locker facility to its members on rent subject to the rental income from locker facilities must not exceed 20% of the gross income of the Nidhi at any time in the financial year.

7) Nidhi companies shall not borrow or lend money other than its members.

8) They cannot pledge any assets deposited by their members as security.

9) According to Nidhi rules, a Nidhi company shall not take deposits or lend money to any corporate body.

10) They cannot enter into a partnership arrangement only because of its lending and burrowing activities.

11) A Nidhi company cannot issue any advertisement in any form to request deposits, provided that private circulation of a fixed deposit scheme among the members will not be considered an advertisement.

12) Nidhi Companies cannot pay any incentives for mobilizing deposits, deploying funds, or granting loans.

Nidhi Company Registration

If you want to start a Nidhi Company in India, an essential thing that you need to do is converting into a Limited Company under the provision of companies Act 2013. Hence, As per provisions, you need at least three directors and seven stakeholders to start a limited company. During the incorporation of limited Nidhi Company, you must take care of all the objectives of a limited company in Memorandum of association. A limited company's objectives state that a Nidhi Company must cultivate the habit thrift and savings among its own members. That is, you can only lend and burrow within your members for mutual benefits.

After incorporating the limited company, A Nidhi Company must follow the following criteria within a financial year:

1) Should not have less than 200 shareholders.

2) They Must have Net owned funds of ten lakh rupees.

3) Must have unencumbered deposits of equal to 10% of the actual deposit.

4) The ratio of net funds to deposits must be 1:20.

If in case, a Nidhi company fails to meet the above criteria at the end of financial year, they can apply for the extensions to regional director within 30 days from the close of 1st financial year.

However, if a Nidhi company fails to meet the criteria in the second financial year as well, then they cannot accept any more deposits from the commencement of 2nd financial year. They cannot accept deposits until they comply with all the provisions to operate as Nidhi Company and be responsible for penal consequences.

Document Required

  • Copy of director's pan card
  • ID proof of every shareholder and director.
  • Passport size photo of all the directors of the company.
  • Copy of electricity and other utility bills as reference for address.
  • Aadhar card copies of directors and shareholders.
  • Copy of a rent agreement, if you are rented.
  • NOC from the landlord.
  • Copy of the property papers

Time Lines

  • (10 to 15 Days)
  • Purchase the Service
  • Upload / send the Documents
  • Discussion with expert
  • Filing of application with registrar authorities
  • Receipt of Registration Certificate
  • Confirmation to client

Service Covered

Pricing for what you want required service

Basic

31950*
  • Expert Consultation
  • 3 DIN Application (if DIN of directors are not available)
  • 3 DSC token, If required
  • Authorised Capital Rs. 10 Lakh 1
  • Incorporation Fee and Stamp Duty Fee 2
  • ESI and PF Registration
  • PAN and TAN
  • Professional Tax (if applicable)
  • Open a Current Account 3
  • Incorporation Certificate
  • MOA and AOA

Business

33950*
  • Expert Consultation
  • 3 DIN Application (if DIN of directors are not available)
  • 3 DSC token, If required
  • Authorised Capital Rs. 10 Lakh 1
  • Incorporation Fee and Stamp Duty Fee 2
  • ESI and PF Registration
  • PAN and TAN
  • Professional Tax (if applicable)
  • Open a Current Account 3
  • Registration with GST
  • Registration with MSME
  • Share Certificate Hard Copy
  • Incorporation Certificate
  • MOA and AOA

Enterprise

44950*
  • Expert Consultation
  • 3 DIN Application (if DIN of directors are not available)
  • 3 DSC token, If required
  • Authorised Capital Rs. 10 Lakh 1
  • Incorporation Fee and Stamp Duty Fee 2
  • Registration with GST
  • Registration with MSME
  • ESI and PF Registration
  • PAN and TAN
  • Professional Tax (if applicable)
  • Open a Current Account 3
  • Share Certificate Hard Copy
  • Incorporation Certificate
  • Commencement of Business Certificate
  • 3 months GST return filing upto 50 invoice per month
  • 3 months account upto 75 entries per month
  • 10 MOA / AOA
  • Notes:
  • * This price is inclusive of all Govt filing fee and excluding GST amount.
  • 1. Additional authorised capital can be increased any time after paying additional stamp duty and other charges.
  • 2. Stamp duty additional required Rs. 7,500 in case of Madhya Pradesh, Rs. 3,000 in case of Kerala and Rs. 10,000 in case of Punjab state incorporation.
  • 3. Current Account will be choosen as per your preference.

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