Nidhi Company Registration Rs. 13,999/- only Register Company anywhere in India What is Nidhi Company or Nidhi Bank? Who governs Nidhi Company? Nidhi company registration How does Nidhi Company work? Nidhi Company Registration fee Benefits of Nidhi Company Registration/Membership Eligibility Criteria for Nidhi Company Registration Documents Required for Nidhi Company Registration Process follow to register Nidhi Company Post Incorporation Compliances of Nidhi Company FAQ What is Nidhi Company or Nidhi Bank? A Nidhi company is a type of company in the Indian non-banking financial sector recognized under Section 406 of the Companies Act, 2013, whose core business is borrowing and lending between its members and also known as a Permanent Fund, Benefit Fund, Quasi-Bank, Mutual Benefit Funds, and Mutual Benefit Company. They are a type of non-banking financial company (NBFC) in India. The main purpose of its incorporation is to encourage savings among its members and establish reserve funds. The company receives deposits from its members and lends money only to its members to benefit each other. Who governs Nidhi Company? Nidhi companies come under Nidhi Rules,2014. The Ministry of Corporate Affairs regulates the Nidhi company, which also has the power to issue instructions to them about accepting deposits.Every Nidhi company has to ensure that it has at least 200 members within one year of its incorporation. Its basic concept is the “Principle of Mutuality”. It is more prevalent in South India, and 80% of Nidhi companies are in Tamil Nadu. Nidhi company registration The Nidhi company registration requires only a minimum paid-up capital of Rs. 10 lacs. It is the simplest and most economical way to launch a loan business in India. It simply requires seven persons and simple paperwork.It can conduct business only by accepting deposits and lending money to its members. It can only operate with its members and not engage directly with the public. However, joining the Nidhi Company is simple and requires little paperwork. The only type of company available to launch a loan company in India without RBI approval is the Nidhi Company. How does Nidhi Company work? It can open three branches after working in the district for three years. Also, to open any branch outside the district, the company will have to take the approval of the RBI. So, if you want to expand your business to another state, you must register for another Nidhi company.Fincosolutions is a leading Nidhi Company registration and management firm in India. We have been providing our services for over 10 years, managing hundreds of companies nationwide. Our services include Nidhi Company registration, regulatory compliance management, accounting & bookkeeping, and corporate secretarial services. We also offer advisory and consultancy services to help our clients make the most of their companies. We are a top consulting company for starting and managing Nidhi company in India. NIDHI COMPANY REGISTRATION FEE Our business is dedicated to giving consumers high-caliber service. We have been providing Nidhi Company Registration services for a long time. We have grown into a fantastic group of specialists and professionals. Our consulting team is here to assist you at any time. Here are some specifics about our services:- Basic ₨ 4,999 In just 15 days Nidhi Registration Nidhi Consultancy MOA/AOI/AADHAAR CARD KYC Know More Premium ₨ 79,999 Nidhi Registration Nidhi Consultancy MOA/AOI/AADHAAR CARD KYC Basic Software Nidhi Compliances Know More Advanced ₨ 39,999 In just 15 days Nidhi Registration Nidhi Consultancy MOA/AOI/AADHAAR CARD KYC Basic Software Know More Benefits of Nidhi Company Registration/Membership Nidhi’s main objective is to motivate members to save money so they can occasionally meet their needs in terms of money. They develop critical thinking skills and become independent, able to cover any future expenses. The advantages of setting up a Nidhi company don’t stop there, either. There are several benefits of registering a Nidhi company. No External Involvement in the Company’s Management; Easy to lend money to or raise capital or borrowings from group members; Easy to manage; Low capital requirement; Relaxation in the number of compliances; Cost-efficient registration; Many privileges and exemptions are provided under the provisions of the Companies Act, 2013; The Minimal involvement of RBI; Secured investment with lower Rate of Interest; Low level of risk; Enjoys the status of a separate legal entity; Better savings option. Some of the key benefits include: Better savings option; Nidhi Company Rules is the Single Regulatory Body; Better substitute of a Credit Co-operative Society; Enjoys the status of a separate legal entity; Fulfilling the financial requirements of the lower and middle-income groups; Simple processing; Easy access to public funds; Limited liability. Eligibility Criteria for Nidhi Company Registration Given below are the essential conditions that must be met with for registering or operating a Nidhi Company. Requirement before Registration Minimum number of shareholders or members – 7 The capital requirement is of Rs. 5 lakhs DIN for Directors Minimum 3 Directors. No Preference Shares shall be issued. The objective of the company shall be to cultivate the habit of saving by “receiving deposits” from and “lending to” it’s members only for their mutual benefit. Requirement after Registration By the end of the 1st year, the number of members or shareholders of the Nidhi Company must be 200 at least. NOF should be more than Rs. 10 lakhs. The ratio for NOF to Deposit should be more than 1:20. Unencumbered deposits should exceed 10 % of outstanding deposits. Documents Required for Nidhi Company Registration PAN & Photo: PAN & photo are required for each & every director & shareholder in India. ID Proof: Anyone of the following: Aadhar card, voter ID, Driving license & passport. Address Proof: Anyone of the following: Bank statement, Mobile bill, Electricity bill, Landline bill. Registered Office: Electricity bill/rent agreement and copy of No objection certificate *Only scan copies of all documents are required. Hard copies are required only from Non Resident Indians (NRI) or Foreign nationals. Process follow to register Nidhi Company A professional’s help is required for Nidhi company registration. Moreover, the procedure has been completely changed by the government to make it easier to do business. But instead, the government is making the process a little complicated. However, Finco solution specializes in Nidhi company registration and has an experience with more than 200 Nidhi company registrations and managing hundreds of Nidhi companies across India. Learn all the 6 steps of Nidhi Company Registration. Obtain DSC and DIN First and foremost, the applicant must apply for a digital signature certificate (DSC). Through the DSC, signatures can be provided in digital format. After securing the DSC, the applicant has to apply for the Director Identification Number. Drafting of MOA and AOA After the above step, the applicant has to file the prescribed documents with the Registrar of Companies . Form INC-32 is use to submit these documents with the MOA and AOA. . When submitting documents, the applicant has to intimate the main objects of forming this entity. Applying for PAN and TAN At the end securing the certificate of incorporation, the Nidhi Company should apply for PAN and TAN. The Income Tax Department will secure the TAN. Apply for a Name Approval In the next step, the applicant has to make an application for name approval to the MCA. During this process, the applicant has to provide three unique names for the Nidhi entity. The names provided must be unique and should not be in conflict with any provision relating to intellectual property rights in India. Incorporation Certificate After reviewing the above documents, the company will secure the certificate of incorporation. This certificate of incorporation is a testament to the company’s incorporation process. The registrar will issue it within 16 to 20 business days. Opening Bank Account This is the final step in incorporating the business. It is crucial to open a bank account on behalf of the business for any transactions Post Incorporation Compliances of Nidhi Company The required compliances for the Nidhi Company are as follows: The Form NDH 1-As per Form NDH-1, it is required to submit the members’ list within 90 days beginning at the close of each fiscal year on a particular form. Form NDH 2: If you are unable to meet the 200-member goal and do not meet the company’s standards during the first budget year of the fiscal year, you may request an extension on this Form from the MCA (Ministry of Corporate Affairs). The Form NDH-3, half-yearly returns, is necessarily to file on Form NDH-3 in addition to the one previously mentioned, the NDH-1 Form. Annual Return and the ROC—Annual returns need to be filed in the MCA using MGT-7. Profit and Loss Statement and the Company’s Balance Sheet—Financial statements and other pertinent documentation are important to file annually on Form AOC-4. Income Tax Returns (ITR).\ It must file annual income tax returns (ITR) for the relevant fiscal year on or before September 30th. FAQ What is Nidhi Company? A Nidhi Company is a Company which carries on the business of accepting deposits and lending the same on demand. It is similar to NBFC but the only basic difference between the two is that Nidhi Companies accept deposits only from its members. The main aim of these companies is to work for the mutual benefit of its members. These companies are not entitled to carry on the business of Hire Purchase Financing, Insurance, Chit Funds and Acquisition of securities or Issue of any Debt Instruments. What is Minimum Number of Member required for nidhi company Registration? Nidhi Companies must have at least three directors and seven shareholders in order to incorporate. Can a Minor Become the member or Director od Nidhi Company? No, a minor is not allowed to become director of a Nidhi Company. Only a person who is a minimum of 18 years old can become the Director of a Nidhi Company. What is Maximum Number of Member can be in Nidhi Company? No, there is no upper limit prescribed for the maximum number of members. However, it is mandatory for a Nidhi Company must have a minimum of two hundred members by the end of the 1st financial year. Can Nidhi Company take deposits from a non-member? No, Only shareholders can participate in financial transactions. Can a Nidhi Company do microfinance business? No, Nidhi Company is not allowed to do microfinance business in India. These are because micro finance is a completely different set of business for an NBFC and require more capital to do the same. Hence, It cannot engage itself into micro finance business. Furthermore, because Nidhi Corporation obtains cash from deposits, there is a high probability that consumer defaults will happen. The organization can go out of business in the event of a distribution of funds without any form of security. How many branches a Nidhi Company can open? A Nidhi Company can open up to 3 branches after three years of continuous profit running of the business. Further, these three branches can be opened within the district only. Further, to open any branch outside the district, you will require the Regional Director (RD) permission. Also, a Nidhi Company cannot open a branch outside the state. Are the Deposits with Nidhi Company safe and secured? Yes, the Deposits with such companies are safe and secure because the Ministry of Corporate Affairs and Reserve Bank of India has framed rules and regulations to ensure the safety and security of Deposits. And the Nidhi Company compulsorily abide by the rules of Central Government. Who can become the shareholder/member of Nidhi Company? Any person who is above 18 years of age as per the standard age proof can become a member of the Nidhi Companies. The person desirous of becoming a member should have valid ID Proof and Address Proof. On what condition Nidhi Company can provide a loan to its members? Nidhi can provide loans to its members only after the members have given/ provided some securities like gold, silver jewelry or any type of financial securities against the loan. Is it to use the word “Nidhi limited” in the name of the company? Yes, it is necessary to use the word “Nidhi Limited” in the name of the company. However, we can also use mutual benefit term. Who is Regulating Authority for Nidhi Company? The regulations passed by the Ministry of Corporate Affairs and the provision of Nidhi Rules, 2014 act as the regulating authority for Nidhi Company. What is the validity of certificate of incorporation? A Certificate of Incorporation has lifetime validity, or till the time the company’s name is not struck off by the ROC (Registrar of Companies). Can a Nidhi company provide unsecured loans? No, Nidhi Company is not qualified to issue unsecured loans. However, it can issue Secured Loans to its shareholders or members. Can a member who has earlier defaulted in a loan from Nidhi Company cannot borrow again from the Nidhi? No, a person cannot borrow again from the Nidhi Company if he has earlier defaulted in a loan. Can a Nidhi company operate in more than one state? No, a Nidhi Company is not allowed to operate outside the state in which it is registered. Can the profits from a Nidhi company be invested in any other business? No, the profits earned from a Nidhi Company cannot be invested in any other business. Can Nidhi Company give an Unsecured Loan? Nidhi can deal only in secured loans. Thus it can give loans against the securities mentioned in the law. What is a term prescribed for fixed deposits in a Nidhi company? A minimum of 6 months and a maximum of 60 months period is prescribed for fixed deposits in a Nidhi Company. From where Nidhi Company accept deposits? A Nidhi Company can accept deposits only from its Registered Members. What is a term prescribed for Recurring deposits in a Nidhi company? A minimum of 12 months and a maximum of 60 months period is prescribed for recurring deposits in a Nidhi Company. Does the Reserve Bank of India regulate Nidhi Companies? No, Nidhi Companies are exempted from the core NBFC provisions of the Reserve Bank of India. How is Nidhi Company Registration different from the registration of other NBFCs? A Nidhi Company is not regulated and governed by the provisions of RBI. Moreover, It’s Registration requires a much smaller amount of capital than Rs 2 Crore paid-up capital requirement for NBFCs. Can Nidhi Company purchase securities and shares from any other organization? No, a Nidhi Company cannot purchase securities and shares from any other organization. What should be the objects of a Nidhi Company? A director of Nidhi Company can hold their office for 10 consecutive years. However, he is eligible for re-appointment only after the expiry of 2 years, starting from the cessation of his term. What is the maximum limit up to which a Nidhi Company can accept deposits? Nidhi Company cannot accept deposits exceeding the limit of twenty times its NOF (Net Owned Funds). How many branches can a Nidhi Company open in a District? A Nidhi Company is allowed to open only three branches within a district. However, to open more than three branches, the said Company is must seek prior approval of the RD (Regional Director) for every additional branch What are the eligibility criteria to be a Director in a Nidhi Company? A Director is firstly required to be a member of the said Company, and then, he must comply with the requirements prescribed under Section 152(4) of the Companies Act, 2013. Is a Body Corporate allowed to become a member in a Nidhi Company? No, a Body Corporate is not allowed to be admitted as a member or shareholder of a Nidhi Company. What is a status of a Nidhi Company? A Nidhi company must be incorporated under the provisions of the Companies Act, 2013, and shall acquire the status of a Public Limited Company. Is a salaried person qualified to become a director of a Nidhi Company? No, such rules have been prescribed banning a salaried person from becoming a director of a Nidhi Company. However, the employment agreement of the said person may place some restrictions on him or herein doing so. Can Nidhi Convert into NBFC? A Nidhi company cannot be converted into NBFC. Can Nidhi Company give a vehicle loan? No, Nidhi Company cannot give a vehicle loan How does Nidhi Bank Work? A Nidhi Company is a company that carries on the business of accepting deposits and lending the same on demand. It is similar to NBFC, but the only basic difference is that Nidhi Companies accept deposits only from its members. What is NOF? The term NOF is the acronym form for the Net Owned Funds. Further, NOF or the Net Owned Fund = Aggregate Paid up share capital + Free Reserves – Accumulated losses (Deferred Revenue Expenditure), and Other Intangible Assets appearing in the Last Audited Balance Sheet.