Nidhi Company

The key business of such a firm is to facilitate lending money between the principal members of the firm. In this way members (or shareholders) are encouraged to save money and invest in the company. The company uses these deposits to provide loans or advances to its members (or shareholders) and to obtain government-issued stocks / bonds / debentures / securities. It is regulated by the Ministry of Corporate Affairs, while the RBI oversees all its financial transactions.

Who Should Register For A Nidhi Company?

It’s ideal for those businesses looking to start a permanent and a mutual benefit fund, or a mutual benefit company.

One DSC & three DINs

The directors must be registered with the MCA
Step 1

Company Name Reservation

Deciding on a company name and registering it
Step 2

RBI Approval

Principle approval from RBI
Step 3

Benefits of a Nidhi Company

Requirement for Nidhi Company

To form a Nidhi Company at least seven members are necessary. Three of them should be named as directors. However, it must have at least 200 members within a year of its inception.In addition, the minimum equity share capital of the company to be registered as a Nidhi company is Rs. 5 lakhs. This amount must be paid. However, the Net Owned Fund (NOF) should be increased to Rs 10 lakh within the year of registration.

  • At least 10% of its outstanding deposits should comprise unencumbered term deposits.
  • The prescribed NOF to deposits ratio should be 1:20.
  • This includes equity share capital and free reserves, as well as accumulated losses and unfinished assets.
  • Must have at least 10% of its best deposits unlicensed fixed deposits
  • The NOF indicated for the deposit ratio should be 1:20. 10% of the total deposits are in the fixed deposit account of the nationalized bank.

What do fund companies not qualify for?

  • Fund companies are not eligible for the following transactions
  • Invite and accept deposits from your own members instead of other members.
  • Engage in chit fund business and leasing finance
  • Lottery
  • Going for any business except borrowing and lending to its members
  • Issuance of debentures, preferred shares or some other debt instruments
  • Accepting deposits and lending from corporate
  • For payment of deposits, fees, incentives and commissions
  • Pay the brokerage amount to lend to members
  • Rental Finance: Runs current members with its members

Process of registration

The Nidhi company registration process usually takes 45 days, and The registration involves the following steps:

  • A minimum of 7 members and 3 directors are required to initiate the merger of Nidhi
  • Apply for DIN and DSC.
  • After obtaining DIN and DSC, apply for reservation for Fund Company name from INC-1 to MCA.
  • After the name is approved, prepare a memorandum of association and association according to the fund items and all other required documents.
  • Apply for the incorporation.
  • Get the Incorporation Certificate.
  • Apply for pan and tan
  • The Ministry of Corporate Affairs (MCA) has released the INC-32 Unified Incorporation Form. So now, the incorporated company can file Form (INC) using Form INC-32 (using Directors Digital Signature Certificate), as well as Electronic (SPICe) in INC-33 and (eAoA) by filling out a simplified proforma online. In the form of INC-34.

Checklist (required documents)

  • All directors must submit
  • Self-certified copy of PAN card
  • Self-certified copy of Driving License / Voter ID Card / Aadhaar Card / Passport
  • Self-certified copy of Bank Statement / Telephone Bill / Mobile Bill / Electricity Bill
  • Passport size photo
  • Sample Signature Certificate
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