Apply for DIN and DSC
The Directors of the Nidhi company are to apply for DIN (Director’s Identification Number) and DSC (Digital Signature Certificate). DIN is issued by the MCA and DSC is a digital signature used for all e-filing processes. This step can be skipped for the Director who has already DSC and DIN
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SAVE 10% COST!!! Nidhi Company Registration
The trait that distinguishes the Nidhi Company Registration from other companies, NBFCs, etc. Is that “Nidhi” deals only with “deposits from” and “loans to” its members (shareholders), and operates from its members’ shared gains. Therefore, in regard to annual enforcement and taxes, such privileges have been given to these businesses. Nidhi Companies in India are formed, governed, and regulated by Section 406 of the new Indian Companies Act of 2013, the Companies (Nidhi Companies) Rules of 2014, and the Chapter XXVI of the Companies Rules, 2014.
The aim of incorporating a Nidhi business is to promote savings among its members, and to accomplish this aim of fostering its members the habit of saving. Nidhi businesses are permitted to take a deposit from the members and lend only to them. In other words, the funds allocated to the Nidhi Company come only from its founders (shareholders) and can only be used by the Nidhi Company’s shareholders.
In the Nidhi Company, the word “Nidhi” means “treasure” and it comes from the Hindi vocabulary.
Registration of Nidhi Company
Section 406 of the Companies Act of 2013 and the Companies (Nidhi Companies) Rules of 2014 contains all the regulations pertaining to the Nidhi Company’s incorporation and governance in India.
The Nidhi Company’s guidance and directives are also issued by the RBI. These are primarily linked to firms’ financial operations and assets, like those of the NBFCs. Due to the “Nidhi Companies” being engaged only by its representatives in the company of deposits and loans, certain exemptions were given by the RBI to these companies. The interest paid by the Nidhi Company on the loans is very fair. The reasons for which these are pursued include the construction/renovation of houses or the schooling of children, etc. The loans are given on behalf of some security.
Advantages of Nidhi Company
- Liability is limited:Liability of Directors and shareholders of the Nidhi Company is limited. In case the company suffers from any loss and faces, financial distress in the course of its business activity, the personal assets of any of the Directors or members are not at risk of being seized by banks, creditors, and government.
- Less Regulation: “Nidhi” companies are governed under the Nidhi Rules, 2014. The Central Government is the regulating authority, which controls its activities and operations. Guidelines imposed by the RBI on “Nidhi” are very few.
- Separate Entity: Nidhi Company is a separate legal entity that can acquire assets and incur debts in its own name.
- No External Involvement:Nidhi Companies take funds from their members and further provides loans, to their members only. All transactions are done within this group only. So, no external factors are affecting the working of these companies. The investors/members themselves oversee the operations of the company.
Requirements for Nidhi Company Incorporation
- Minimum number of shareholders or members – 7
- Minimum number of Directors -3
- The minimum capital requirement is about Rs. 5 lakhs
- DIN for Directors
- Minimum 3 Directors.repeat
- 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” its members only for their mutual benefit.
STEP-1
STEP-2
STEP-3
STEP-4
STEP-5
STEP-1
STEP-2
Name Approval
You need to choose and suggest 3 different names to the MCA for your Nidhi Company. Out of these 3 names, only one will be accepted for your Company by the MCA. The proposed names must be unique and not matching to the names of other already registered companies. As per Rule 8 of the Company Act, the approved name will remain valid for 20 days only.
You need to choose and suggest 3 different names to the MCA for your Nidhi Company. Out of these 3 names, only one will be accepted for your Company by the MCA. The proposed names must be unique and not matching to the names of other already registered companies. As per Rule 8 of the Company Act, the approved name will remain valid for 20 days only.
STEP-3
MOA & AOA
Memorandum of Association) and AoA (Articles of Association). These must mention the main objective of incorporating a Nidhi company as a charity. The MoA and AoA are to be filed to the ROC (Registrar of Companies) with the subscription statement.
Memorandum of Association) and AoA (Articles of Association). These must mention the main objective of incorporating a Nidhi company as a charity. The MoA and AoA are to be filed to the ROC (Registrar of Companies) with the subscription statement.
STEP-4
CIN
It takes between 15-25 days to form a Nidhi company and get the incorporation certificate. This certificate declares that a company has been created and it mentions the company identification number (CIN) as well.
It takes between 15-25 days to form a Nidhi company and get the incorporation certificate. This certificate declares that a company has been created and it mentions the company identification number (CIN) as well.
STEP-5
PAN, TAN & Bank Account
You need to apply for both “PAN and TAN”. The PAN and TAN are usually received within 7 working days. Later, you have to get a bank account opened by submitting the Certificate of Incorporation, MoA, AoA, and PAN to the bank.
You need to apply for both “PAN and TAN”. The PAN and TAN are usually received within 7 working days. Later, you have to get a bank account opened by submitting the Certificate of Incorporation, MoA, AoA, and PAN to the bank.
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Documents Required for Nidhi Company Registration in India
PAN & Photo
The PAN & photo are required for each & every director & shareholder in India.
ID Proof
Any one of the following: Aadhar card, voter ID, Driving license & passport.
Address Proof
Any one of the following: Bank statement, Mobile bill, Electricity bill, Landline bill.
Registered Office
Electricity bill/rent agreement and a copy of No objection certificate
What do you get
DSC
Digital signature for two directors to digitally sign the documents
AOA
Defines the rules of the Business
MOA
Defines the objectives of the business
PAN Number
PAN number of the company to open a bank account
TAN Number
Tax deduction number for filing tax return
Incorporation Certificate
Certificate of incorporation bearing company's registration number and details
FAQs for Nidhi Company Registration
Nidhi Company is one of the forms of Non-Banking, Financial Company (NBFC) that do NOT require RBI approval. The Nidhi Company has been exempted by the Reserve Bank of India (RBI) from taking the registration. Further, there is no requirement for keeping the minimum capital at Rs.2 crore to start the Nidhi Company in India.
Nidhi Company isn’t administered by the RBI yet by the focal government and subsequently the focal government has presented the Nidhi Company rules 2014 so as to more readily oversee the organization in a more straightforward way.
No, Nidhi Company isn’t permitted to do Microfinance business in India. These are on the grounds that miniature account is a totally extraordinary arrangement of business for an NBFC and require more cash-flow to do likewise. Subsequently, Nidhi Company can’t draw in itself into miniature account business. Further, since Nidhi Company raises reserve from stores and thus, in the event that it passes the equivalent to part with no security, at that point there will be extraordinary odds of client default which will at last outcomes into insolvency of the Nidhi Company.
No, Nidhi Company doesn’t need any RBI permit to begin the business in India; this is on the grounds that Nidhi Company has been excluded by the RBI from its center arrangements and consequently, there is no RBI prerequisite for Nidhi Company enrollment in India.
No, it isn’t obligatory to have Nidhi Company programming to maintain your money business. In any case, in the event that you need to maintain the business appropriately, at that point you will require the Nidhi Company programming. Nidhi Company fundamental business is to acknowledge stores and loan cash to its individuals thus count of revenue and so forth requires regular computations and subsequently, it is encouraged to utilize Nidhi Company programming for appropriate and effective working.