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1. Collect the documents relevant for registration
2. We shall apply for registration on your behalf.
3. You can get registration in no time.
It is an NBFC (non-banking finance company) that is registered under Section 406 of the Companies Act of 2013. The main business of such a corporation is to facilitate money lending Trade, among the company's core members.
This encourages members (or owners) to save money and invest it in the company. These funds are then utilised by the company to give loans and advances to its members (or shareholders), as well as to purchase government-issued stocks, bonds, debentures, and securities.
The Ministry of Corporate Affairs regulates it, while the Reserve Bank of India oversees all its financial transactions.
The Reserve Bank of India does not require a licence to incorporate a Nidhi Company. As a result, forming the Nidhi Company is simple. “Nidhi Limited” should there be at the end of the name because Nidhi Companies are registered as Public Companies.
Easy loan processing & sanction - Because the Nidhi Company exclusively lends to members, the entire loan approval procedure is simplified when compared to banks and NBFCs.
Members of Nidhi Company can borrow money from the company at lower interest rates than NBFCs
Lesser Regulations - The Nidhi Rules, 2014 govern Nidhi Companies. Although the activities of Nidhi Companies are supervised by the Central Government, they are subject to less regulations than NBFCs.
Low Capital Required - A Nidhi Company can be started with a capital of Rs. 5,00,000. The capital must be increased to Rs. 10, 00,000 or more within a year after incorporation.
Limited Liability - Directors and members' liability is restricted to the amount of capital they have invested. As a result, in the event of a loss, the directors and members cannot be forced to pay the company's liabilities out of their personal assets.
Easy mechanism for accepting deposits - When inviting public deposits, public firms must adhere to a number of regulations. However, Nidhi Company is exempt from these regulations. It may readily obtain deposits from the general public by simply enrolling them as members.
Good option to motivate savings - The Nidhi Company accepts deposits from its members at competitive interest rates, encouraging them to save.
Simplified Registration Process - Unlike NBFCs, Nidhi Company is not obliged to seek a licence from the RBI. Nidhi corporations must register with the MCA as a public corporation. The cost of incorporation is relatively also low.
Micro level banking - Nidhi Companies play a vital role in meeting the financial demands of middle and low-income populations by providing them with little paperwork. These, in particular, aid in the provision of banking services in rural and distant locations.
Low Capital - A Nidhi Company can be started with a capital of Rs. 5,00,000. The capital must be increased to Rs. 10, 00,000 or more within a year after incorporation.
Limited Liability - Directors and members' liability is restricted to the amount of capital they have invested. As a result, in the event of a loss, the directors and members cannot be forced to pay the company's liabilities out of their personal assets.
The first stage is for the applicant to secure a Digital Signature Certificate; once the DSC has been received, the applicant should apply for a Director Identification Number.
The applicant must then submit an application for name approval to the MCA. Once the application is submitted, the applicant must provide prescribed documentation with the ROC. The names provided should be distinctive and should not violate any intellectual property rights laws.
INC form 32 must be used to file the documents, which must be accompanied by MOA and AOA. While submitting the documentation, the applicant must state the main purp
ose for forming the entity.
An incorporation certificate will be provided after reviewing the Incorporation Certificate. This certificate is issued by the registrar within 15 Days.
The next step is when the Nidhi Company is required to apply for PAN and TAN.
This is the final step while incorporating a Nidhi Company. At this stage, it is necessary to open a Bank account on behalf of the business for any transaction.
Conditions to be fulfilled for getting "Nidhi" status Within one year of its registration
If Nidhi Company meets all the aforementioned requirements, it must file NDH-1 together with the required costs within 90 days of its incorporation. A practising CA/ CS/ CWA must certify the form.
Extension of another financial year can be availed upon submission of NDH-2 to the Regional Director within 30 days from the end of the first financial year.
If it still doesn't meet the requirements after the second fiscal year, it won't be able to receive deposits until it does, and a penalty will be applied.
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The parts of NIDHI COMPANY must be opened when it has earned a net profit after tax ceaselessly during three preceding years. After the time of three years is elapsed the Nidhi company can open up to 3 branches in the local area. It can possibly open its branches only when it has presented a budget summary with the registrar.
Nidhi can provide loans to its members only after the members have given/ provided some securities like gold, silver jewellery or any type of financial securities against the loan.
When a company gets incorporated, it is active and in-presence for whatever length of time that the yearly compliances are met with normally.
Any person who is above 18 years of age as per the standard age proof can become a member of the Nidhi Companies. The person desirous of becoming a member should have valid ID Proof and Address Proof.
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