Nidhi Company Registration

Nidhi Company Registration

A Nidhi Limited Company can be formed under section 406 of the company act 2013. It is regulated by MCA (Ministry of Corporate Affairs). RBI has full authority to issue directions in the activities of the nidhi company just as other banking and Non Banking Financial Companies ( NBFC) follow the rules of RBI similarly Nidhi Limited Company also has to follow the rules and regulations made by RBI. The Nidhi Limited Company in India is formed to inculcate the habit of saving and saving among its members. These companies only deal with their members. Nidhi Limited Company is formed by members with the objective of saving and investing in mutual funds. Nidhi Limited Companies are governed by Nidhi rules 2014, amendment rules 2022 Most of these features are from a Public Limited Company.RBI approval is not necessary to register these companies because RBI has given special exemption. To follow the main provision in the NBFC category, every nidhi company has to ensure that its members are 200.

The Nidhi Limited Company refers to a company that grows the savings of its members and encourages them to investment in more mutual funds. This company lends deposits to its members only for their mutual benefit.

We can understand the meaning of Nidhi Limited Company with the lines given below:

Minimum requirements for a Nidhi Company

Number of Members

Minimum 7 members and 3 directors

(Out of these 7 members three directors can be appointed)  

Minimum Capital Requirement                                                                                                 

Minimum capital requirement for a Nidhi Limited Company is Rs. 1000000

Ratio of net owned funds                     

The ratio of net owned fund to deposit of should not more than 1:20

Advantages of a Nidhi Limited Company

  • The creation of a Nidhi Limited Company is simpler than other forms of non banking finance companies and finance companies.
  • It encourages members to do more savings.
  • Nidhi limited company does not need to get permission from RBI (Reserve Bank of India) to register.
  • It takes minimum time to get registered compare to other companies.
  • No more documents are required to register to this company.
  • The interference of outsiders is not allowed in Nidhi Limited Company so that the operation of the Nidhi Ltd Company can be done continuously.
  • The loans given to the members are at the lower rate of interest than the market rate.

Documents required for the registration of a Nidhi Limited Company

  • PAN card of all the Directors and Members.
  • Aadhar card /Voter ID/Passport
  • Photograph of all Directors and Members
  • Electricity Bill or Rent agreement for address proof
  • Latest Bank Statement not older than 2 months is required for all the Directors and Shareholders of the company.

Registration Process for a Nidhi Limited Company

To register a Nidhi Company, following steps need to be taken:

  Identifying the minimum 3 directors and 7 shareholders

It is mandatory for any Nidhi limited company to have at least 3 Directors and 7 Shareholders to register. The company should have a minimum of 200 shareholders within one year for the date of incorporation.

Digital Signature Certificate (DSC) fabrication of all directors

List of documents is given below:

  • PAN Card
  •  Aadhar Card
  • Electricity Bill or Rent Agreement
  • Bank account Statement 1st page (signed by the bank)
  • Application form filled and signed
  • Photo ID card issued by any government authority bearing the signature of the individual.

Get directors identification number (DIN) of all proposed directors:

The DIN is an essential document for the registration. The following documents are required for the DIN

  • Electricity bill or
  • Bank statement copy or
  • Gas bill or
  • Mobile Bill or
  • Any other utility bill
  • Copy of PAN self attested
  • Copy of Passport

Name Approval

It is necessary to fix the name of the organisation while registering. This name should not be similar to any other company, only then this name will be recognised.

Execution of company registration documents

After the name of the company is approved, the company corporation document are executed by the promoters in the prescribed format.

Submission of company registration document to the ROC (Registrar of companies)

After the memorandum of association (MOA) and article of association (AOA) are ready, the company should be submitted to the rock centre for registration.

Allocation of corporate identification of incorporation

 The ROC will register the company after due verification of MOA (Memorandum of Association), AOA (Article (Article of association) and other detail and will issue the certificate of Incorporation (COI). The central ROC will also allocate a corporate Identification number (CIN) to the company that is registered. The COI is now issued by the ROC in digital form with the digital signature certificate.

A Nidhi limited company is legally registered after completing all this process and the company can operate its work without any fear.

Deposits under Nidhi Limited Company in INDIA

Saving Deposit

The maximum amount of saving account in a given period interest should not exceed Rs. 100000 and the rate of interest shall not exceed 2% above the rate of interest above the saving bank account by the nationalized bank.

FD (Fixed Deposit)

The maximum interest rate on fixed deposit cannot exceed the rate of interest provided by RBI for non banking financial organisations.

RD (Recurring Deposit)

It is a unique term deposit that is offered by Indian banks. It is investment tool which allows people to make regular deposits and earn decent returns on the investment. The recurring deposits shall be accepted for a minimum period of 12 months and a maximum period of 60 months. The maximum rate of interest on RD shall be the same as in case of FD i.e. 12.5%.

Loan which provides by the Nidhi Limited Company

  • In lieu of National Saving Certificates, insurance policies, government securities and FD receipts.
  • Gold Loan: Mortgage loan on silver, gold and jewellery. The total value of loan should not exceed 80% of the total value of gold, silver and other jewellery.
  • Loan on immovable property: This type’s loan repayment period shall not exceed 7 years and repayment of loan shall not exceed 50% of the total loan.

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