Nidhi Company Registration

Nidhi Company Registration" refers to the process of registering a Nidhi Company, which is a type of non-banking financial company (NBFC) recognized under the Companies Act of India. Nidhi Companies primarily function to promote the habit of thrift and savings among its members and lend to its members only. The registration process involves adhering to specific regulations laid down by the Ministry of Corporate Affairs, including minimum capital requirements, membership criteria, and compliance with Nidhi Rules, 2014. It's essential for those considering Nidhi Company registration to understand the legal obligations and operational framework associated with such entities.

Nidhi Company Registration

The majority of investment organizations in India handle large sums of money, but banks offer minimal room for savings development. Nidhi Company offers the most effective and simple solution to save money while also providing opportunities for financial advancement. It is a public limited company that is controlled by the Companies Act of 2013. Learn about the benefits, procedure, criteria, and expenses for Nidhi company registration.

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Nidhi Company - Incorporation Certificate [Sample]

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What is Nidhi Company?

Nidhi Company is a non-banking financial company (NBFC). Its main role is to lend and borrow money from its members. The goal is to instill the habit of saving in its members and operate on the mutual benefit concept, which is governed by the Ministry of Corporate Affairs.

Nidhi Company does not need to obtain a license from the Reserve Bank of India (RBI), making it very simple and convenient to establish. It is also known as Mutual Benefits Finance Company. It is registered as a public limited company with “Nidhi Limited” as the last word in its name.

Benefits of Nidhi Company registration

Inculcates the habit of savings:

The sole objective of Nidhi company is to promote the culture of savings among its members.

Few RBI guidelines:

Nidhi company falls under NBFC category, but it does not require approval of Reserve Bank of India.

Limited Liability:

As per the Companies Act, 2013, directors and shareholders have limited liability. If the company suffers any losses or issues, personal assets of the directors and shareholders are secure.

Separate Legal Entity:

Nidhi Company is a separate legal entity which means it can acquire assets and incur debts on its own name.

Easy Formation:

The process of Nidhi company formation is very simple and easy. There are very few requirements compared to other NBFCs.

Ease of Management:

Even though Nidhi Company is an NBFC, it is very easy to manage and make changes in the organization.

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Documents required for Nidhi Company registration

  1. Passport size photographs of members
  2. Copy of Aadhar Card or Voter ID
  3. Copy of PAN Card of the members
  4. Email address and phone number
  5. Proof of registered place of business
  6. Bank statement (not older than two months)
  7. No Objection Certificate from the owner of the property

Minimum requirements for Nidhi Company Registration

  1. A minimum of seven members is required
  2. At least three members must be the directors of the company
  3. A minimum of 10 lakh rupees is required for Authorized Capital
  4. A minimum of 10 lakh rupees is required for share capital
  5. Issuing preference shares is not allowed
  6. The objective of the company should be to receive deposits and lend to its members only.

Nidhi Company registration Process

Step 1. Application for Digital Signature Certificate (DSC)

Nidhi company registration is a complete digital process, and therefore the requirement of a digital signature certificate is a mandatory criterion. Directors, as well as subscribers to the memorandum of the company, need to apply for a DSC from the certified agencies. Obtaining a DSC is a complete online process, and it can be done within 24 hours. This process involves 3 simple verifications: document verification, video verification, and phone verification.

Step 2. Application for the Name Availability

Name application for Nidhi Company can be done through the SPICe RUN form, which is part of the SPICe+ form. While making the name application of the company, the industrial activity code as well as the object clause of the company have to be defined.

Note: It should be ensured that the business name does not resemble the name of any other already registered company and also does not violate the provisions of emblems and names (Prevention of Improper Use Act, 1950). You can easily check the name availability by using our company name search tool to verify the same.

Step 3. Filing of SPICe Form (INC-32)

Post name approval, details with respect to registration of the company has to be drafted in the SPICe+ form. It is a simplified proforma for incorporating a company electronically. The details in the form are as follows:

  1. Details of the company
  2. Details of members and subscribers
  3. Application for Director Identification Number (DIN)
  4. Application for PAN and TAN
  5. Declaration by directors and subscribers
  6. Declaration & certification by professional

Step 4. Filing of e-MoA (INC-33) and e-AoA (INC-34)

SPICe e-MoA and e-AoA are the linked forms which have to be drafted at the time of application for company registration.

Memorandum of Association (MOA) is defined under section 2(56) of the Companies Act 2013. It is the foundation on which the company is built. It defines the constitution, powers and objects of the company.

The Articles of Association (AOA) is defined under section 2(5) of the Companies Act. It details all the rules and regulations relating to the management of the company.

Step 5: Issuance of DIN, PAN, TAN & Certificate of Incorporation

After approval of the above-mentioned documents from the Ministry of Corporate Affairs, a PAN, TAN, & Certificate of Incorporation will be issued by the concerned department. Now, the company is required to open a current bank account by using these documents. You can contact us for assistance with your current bank account opening.

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