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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.
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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.