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Enjoy the perks of registering a Nidhi Company in India like Limited Liability, easy access to loans and other benefits. Contact Registrationwala to get started.

Price Starts RS @ 29,999 /-

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Nidhi Company Process

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Nidhi Company Registration in India

Nidhi Company is a business entity in India governed under the Companies Act 2013. Its sole objective is to engage with thrift and savings among its members. A Nidhi Company is a Non-Banking Financial Institute that exclusively provides services like lending and deposits to its members. Therefore, it can be said a Nidhi Company in India only consists of funding from its members and shareholders.

Starting a Nidhi Company in India means starting a Non-Banking Financial Companies class. They are governed by the Reserve Bank of India. This body tells the registered Nidhi Company guidelines about lending and depositing activities. However, Nidhi Companies can only deal with their members. Therefore outside members are not allowed. 

Why should you register a Nidhi Company?

Benefits of Nidhi Company

Nidhi Company is one of the business entities that enjoy several perks of the company. The following are those perks that make Nidhi Company Registration quite a beneficial affair:

  1. Easy Access to loans: As a Nidhi Company is a recognized infrastructure by the Central government; it is trusted more by the banks. Therefore, once you register a Nidhi Company, it is easy to acquire loans and other types of findings.
  2. Continued Existence: A Nidhi Company enjoys a continued existence even after one of the directors is deceased.
  3. Easy to incorporate: The Incorporation of a Nidhi Company is quite easy. It follows the standard procedure of Company Registration in India.
  4. Separate legal Identity: After forming a Nidhi Company, it becomes a separate legal identity in India. It can be said that a Nidhi Company becomes a separate individual who shall be able to own a property, invest, etc.
  5. Limited Liability: A Nidhi Company enjoys limited liability for its members. This means that in the event of loss, the members of the Nidhi Company won't have their assets harmed.

 

Eligibility Criteria for Nidhi Company Registration in India

  1. The minimum number of allowed directors in a Nidhi Company is three.
  2. At least one director of the Nidhi Company should be from India.
  3. The minimum number of allowed shareholders in a Nidhi Company is seven.
  4. Nidhi Company capital requirement: The minimum equity share capital for a Nidhi company registration is INR 5 Lakh.

Rules of Incorporation

  • A to-be incorporated Nidhi Company must be a public company.
  • A to-be incorporated Nidhi Company must have a minimum paid-up equity share capital of five lakh rupees.
  •  A to-be incorporated Nidhi Company must issue preference shares.
  • A to-be incorporated Nidhi Company must not have any object in its Memorandum of Association other than the object of cultivating the habit of thrift and savings amongst its members.
  • A to-be incorporated Nidhi Company must have 'Nidhi Limited' as the last part of its name.

Share Capital and Allotment

  • Every Nidhi must issue equity shares of the nominal value of not less than ten rupees each.
  • No service charge must be levied for the issue of shares.
  • Every Nidhi must allot at least ten equity shares or shares equivalent to one hundred rupees to each deposit holder. A savings account holder and a recurring deposit account holder must hold at least one equity share of rupees ten.

Membership

  • A Nidhi must not admit a body corporate or trust as a member.
  • A Nidhi must ensure that its membership is not reduced to less than two hundred members.
  • A Nidhi must not admit a minor as a member, provided that deposits can be accepted in the name of a minor if their legal guardian is also a member of Nidhi.

Net-owned Funds

Every Nidhi must maintain Net Owned Funds (excluding the proceeds of any preference share capital) of not less than ten lakh rupees or such higher amount as the Central Government may specify from time to time.

Rate of interest

A Nidhi company must charge an interest rate on any loan that must not exceed seven and a half percent above the highest rate of interest offered on deposits by Nidhi. The rate of interest must be calculated on the reducing balance method.

 

Rules relating to Directors

  • The director of a Nidhi must be its member.
  • The director of a Nidhi must hold office for up to ten consecutive years on the Board of Nidhi.
  • The director of a Nidhi must be eligible for re-appointment only after the expiration of two years of ceasing to be a Director.
  • The director of a Nidhi must comply with the requirements of the Nidhi Act. In addition, they must not have been disqualified from any appointment.

 

Documents Required for Nidhi Company Registration in India

Following are the documents required for company incorporation for each director/ shareholder

  • Self-attested PAN card copy.
  • Four Photographs.
  • Self-attested copy of any one of the Identity Proof like Driving License, Passport, Voter ID & Aadhaar Card
  • Self-attested copy of any one of the Address Proof like Bank Pass Book/ Bank Statement, Telephone Landline Bill, Mobile Bill & Electricity Bill
  • Company Address proof Electricity Bill, Telephone Bill, Mobile Bill & Gas Bill, AND Rent Agreement (if rented) AND NOC for doing Business & for taking Registration.

 

Process for Nidhi Company Registration in India

Nidhi Company registration process

How to register a Nidhi Company? The Nidhi Companies are regulated by the Companies Act, Nidhi Rules of 2014. The procedure for online Nidhi company registration in India is as follows:

  • Choosing a unique name for the Nidhi company. Conduct the Nidhi company name search. You can also hire Nidhi experts for Nidhi Company name suggestions.
  • Reserving the name of the Nidhi company using the RUN application
  • Obtaining the DSC and DIN of the directors of the company
  • Drafting MOA and AOA of the company
  • Submitting the online application for Nidhi company incorporation
  • Assessment of the application by the Ministry of Corporate Affairs

Rules for establishing Nidhi Branches

  • A Nidhi can open branches only if it has continuously earned net profits after tax during three financial years.
  • A Nidhi can open up to three branches within the district.
  • A Nidhi, which wants to open more than three branches within the district or any branch outside the district, must obtain the prior permission of the Regional Director.
  • An intimation must be given to the Registrar about the opening of every branch within thirty days.
  • A Nidhi must not open branches or collection centers or offices, or deposit centers where its registered office is situated or unless financial statements and annual returns are filed with the Registrar.

Branch Closure

  • A Nidhi must not close any branch unless it
  • Publishes an advertisement in a newspaper at least thirty days before such closure, informing the public.
  • Fix a copy of such advertisement informing such closure on the notice board of Nidhi for at least thirty days from the date of ad publication.
  • Gives an intimation to the Registrar within thirty days of closure.

Nidhi Regulations regarding Deposits

  • A registered Nidhi must accept deposits for a minimum of six months and a maximum of sixty months.
  • A registered Nidhi must accept recurring deposits for a minimum of twelve months and a maximum of sixty months.
  • The maximum balance in a savings deposit account at any given time must not exceed one lakh rupees. In addition, the interest rate must not exceed two percent above the interest rate payable on the savings bank account by nationalized banks.
  • A Nidhi must offer interest on fixed and recurring deposits at a rate not exceeding the maximum interest rate prescribed by the Reserve Bank of India.
  • A registered Nidhi must foreclose a fixed deposit account or a recurring deposit account of a depositor subject to the following conditions:
    1. A Nidhi must not repay any deposit within three months from its acceptance.
    2. A Nidhi, at the request of the depositor, must repay any deposit after three months. Furthermore, the depositor must not be entitled to any interest up to six months from the date of deposit.
    3. At the depositor's request, a Nidhi must make repayment of a deposit before the expiry of the period for which Nidhi accepted such deposit. In addition, the rate of interest payable by Nidhi on such a deposit must be reduced by two percent from the rate which Nidhi would have ordinarily paid.

Nidhi Regulations regarding Loans

·         A Nidhi must provide loans only to its members.

·         The loans given by a Nidhi to a member must be subjected to the following limits:

  • Two lakh rupees, where the total amount of deposits of such Nidhi from its members is less than two crore rupees;
  • Seven lakh fifty thousand rupees, where the total amount of deposits of such Nidhi from its members is more than two crore rupees but less than twenty crore rupees;
  • Twelve lakh rupees, where the total amount of deposits of such Nidhi from its members is more than twenty crore rupees but less than fifty crore rupees; and
  • Fifteen lakh rupees, where the total amount of deposits of such Nidhi from its members is more than fifty crore rupees:

·         The deposits must be calculated based on the last audited annual financial statements.

·         A Nidhi must give loans to its members only against the following securities:

a.    Gold, silver, and jewelry

b.    Immovable Property

c.    Fixed Deposit Receipts

d.    National Savings Certificates

e.    Other Government Securities

f.     Insurance Policies 

Restrictions & Prohibitions

Nidhi Company Compliances

A Nidhi company must not be involved in the

  • chit fund business,
  • hire purchase finance,
  • leasing finance,
  • insurance, or
  • acquire securities issued by anybody corporate.

 A Nidhi company must not issue

  • preference shares,
  • debentures, or
  • any other debt instrument by any name or in any form whatsoever.

A Nidhi company must not open any current account with its members.

A Nidhi company must not

  • Acquire another company by purchasing securities,
  • Control the composition of the Board of Directors of any other, or
  • Enter into any arrangement for the change of its management.
  • A Nidhi company must not carry on any business other than the business of borrowing or lending in its name.
  • A Nidhi company must not accept deposits from or lend to any person other than its members.
  • A Nidhi company must not pledge any of the assets lodged by its members as security.
  • A Nidhi company must not take deposits or lend money to anybody corporate.
  • A Nidhi company must not enter into any partnership arrangement in its borrowing or lending activities.
  • A Nidhi company must not issue any advertisement for soliciting a deposit.
  • A Nidhi company must not pay any brokerage or incentive for
    1. Mobilizing deposits from members
    2. Deployment of funds, or
    3. Granting loans.

 

Our Assistance in Nidhi Company Registration in India

We at Registrationwala provide end-to-end solutions for Nidhi company registration with the help of our Nidhi company registration consultant. Our services include:

  • Company name research
  • Obtaining DSC and DIN
  • MOA and AOA drafting
  •  Application filing
  • Following up with the Ministry of Corporate Affairs

Through Nidhi Company Incorporation, you can start your own mutual fund business. If it is what you want to do, contact Registrationwala at site:www.registrationwala.com and let us handle online Nidhi Company Registration.

 

FAQs

Q.1)  What is a Nidhi Company?

A. Nidhi Company is a business entity in India governed under the Companies Act 2013. Its sole objective is to engage with thrift and savings among its members. A Nidhi Company is a Non-Banking Financial Institute that exclusively provides services like lending and deposits to its members. Therefore, it can be said a Nidhi Company in India only consists of funding from its members and shareholders.

Q.2) What are the benefits of a Nidhi Company?

A. Nidhi Company is one of the business entities that enjoy several company perks. The following are those perks that make Nidhi Company Registration quite a beneficial affair:

  •  Easy Access to loans: As a Nidhi Company is a recognized infrastructure by the Central government; it is trusted more by the banks.
  •  Continued Existence: A Nidhi Company enjoys a continued existence even after one of the directors is deceased.
  •  Easy to incorporate: The Incorporation of a Nidhi Company is quite easy. It follows the standard procedure of Company Registration in India.
  •  Separate legal Identity: After forming a Nidhi Company, A Nidhi Company becomes a separate individual who shall be able to own a property, invest, etc.
  •  Limited Liability: A Nidhi Company enjoys limited liability for its members.

Q.3) What are the rules of incorporation of a Nidhi company?

A. The following are the rules of incorporation defined in the Nidhi Rules of the Company Act, 2014:

  •  A to-be incorporated Nidhi Company must be a public company.
  •  A to-be incorporated Nidhi Company must have a minimum paid-up equity share capital of five lakh rupees.
  •  A to-be incorporated Nidhi Company must issue preference shares.
  •  A to-be incorporated Nidhi Company must not have any object in its Memorandum of Association other than the object of cultivating the habit of thrift and savings amongst its members.
  •  A to-be incorporated Nidhi Company must have 'Nidhi Limited' as the last part of its name.

Q.4) What are the rules of membership in a Nidhi Company?

A. Membership rules:

  •  A Nidhi must not admit a body corporate or trust as a member.
  •  A Nidhi must ensure that its membership is not reduced to less than two hundred members.
  • A Nidhi must not admit a minor as a member, provided that deposits can be accepted in the name of a minor if their legal guardian is also a member of Nidhi.

Q.5) What is the net-owned fund requirement of a Nidhi company?

A. Every Nidhi must maintain Net Owned Funds (excluding the proceeds of any preference share capital) of not less than ten lakh rupees or such higher amount as the Central Government may specify from time to time.

Q.6) How the rate of interest decided in a Nidhi company?

A. A Nidhi company must charge an interest rate on any loan that must not exceed seven and a half percent above the highest rate of interest offered on deposits by Nidhi. The rate of interest must be calculated on the reducing balance method. 

Q.7) What are the regulations defined in the Nidhi rules for the appointment of its directors?

A. Regulations for directors:

  •  The director of a Nidhi must be its member.
  •  The director of a Nidhi must hold office for up to ten consecutive years on the Board of Nidhi.
  •  The director of a Nidhi must be eligible for re-appointment only after the expiration of two years of ceasing to be a Director.
  •  The director of a Nidhi must comply with the requirements of the Nidhi Act. In addition, they must not have been disqualified from any appointment.

Q.8) What are the documents required for the online Nidhi company registration?

A. Following are the documents required for Nidhi company registration for each director/ shareholder:

  • Self-attested PAN card copy.
  • Four Photographs.
  • Self-attested copy of the Identity proofs.
  • Self-attested copy of the Address Proofs.
  • Company Address proof,  Rent Agreement (if rented) , and NOC for doing business & for taking registration. 

Q.9) How to register a Nidhi Ltd company in India?

A. Nidhi Companies are regulated by the Companies Act, Nidhi Rules of 2014. The procedure for online Nidhi company registration in India is as follows:

  • Choosing a unique name for the Nidhi company. Conduct the Nidhi company name search. You can also hire Nidhi experts for Nidhi Company name suggestions.
  • Reserving the name of the Nidhi company using the RUN application.
  • Obtaining the DSC and DIN of the directors of the company.
  • Drafting MOA and AOA of the company.
  • Submitting the online application for Nidhi company incorporation.
  • Assessment of the application by the Ministry of Corporate Affairs.

Q.10) What are the Nidhi rules for establishing a Nidhi Branch?

A. Rules:

  •  A Nidhi can open branches only if it has continuously earned net profits after tax during three financial years.
  •  A Nidhi can open up to three branches within the district.
  •  A Nidhi, which wants to open more than three branches within the district or any branch outside the district, must obtain the prior permission of the Regional Director.
  •  An intimation must be given to the Registrar about the opening of every branch within thirty days.
  •  A Nidhi must not open branches or collection centers or offices, or deposit centres where its registered office is situated or unless financial statements and annual returns are filed with the Registrar.

Q.11) In which case a branch of Nidhi company gets closed?

A Nidhi must not close any branch unless it

  • Publishes an advertisement in a newspaper at least thirty days before such closure, informing the public.
  • Fix a copy of such advertisement informing such closure on the notice board of Nidhi for at least thirty days from the date of ad publication.
  • Gives an intimation to the Registrar within thirty days of closure.

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