Nidhi Company Registration

Online Nidhi Company Registration in India

Nidhi Companies are a type of NBFC that is founded, governed, and regulated by Section 406 of the revised Indian Companies Act of 2013, as well as the Companies (Nidhi Companies) Rules of 2014. The goal of forming a Nidhi Company is to encourage savings and frugality among its members and it tries to achieve this goal by instilling in its members the habit of saving and thrift. They are only permitted to accept deposits from and lend to members, implying that cash given to a Nidhi company comes from its members (shareholders) and is only to be used by the shareholders of the Nidhi Company. The RBI oversees all of its financial transactions, and it is governed by the Ministry of Corporate Affairs. Get your Nidhi Company registered in India quickly and effortlessly by partnering with India’s leading Nidhi Company Registration service provider. Our team of experts will assist you every step of the way.

Benefits of Nidhi Company Registration

The following are the benefits of Nidhi Company Registration:

• Capital Requirement: As per Nidhi Rules, 2014, the minimum capital requirement for Nidhi Company Registration in India is Rs. 10 lakhs only.
• Encourages Savings: It aids in the development of the habit of saving and thrifting among its members. 
• There is no outside involvement because it is not governed by any trusts or committees. It is an investing feature that the investors possess. Nidhi funds are thus governed by their members. 
• Borrowings: A member can borrow money at a lower interest rate than a bank and with fewer responsibilities.
• Uninterrupted Operations: The normal operations of a Nidhi Company Registration are not uninterrupted even at the death, insanity, insolvency, or retirement of any member. However, the Nidhi Company will remain in operation irrespective of any such inevitable change in any type of membership.

Requirements for Nidhi Company Registration in India

The following are some vital requirements for Nidhi Company Registration in India:

• The Nidhi Company must have at least 200 members or shareholders before the end of the first year.
• The NOF should be greater than Rs. 10 lakhs.
• The NOF-to-deposit ratio should be more than 1:20.
• The amount of unencumbered term deposits shall not be less than 10% of the total amount of outstanding deposits.
• Nidhi can pay up to 12.5% interest on FDs and RDs and 6% on savings accounts.
• Nidhi has the ability to deposit up to 20 times the amount invested.
• Every year, it must file Annual Returns, Income Tax Returns, and Financial Statements.

Documents Required for the Registration of Nidhi Company in India

Following are some crucial documents required for Nidhi Company Registration in India:

• Basic Checklist:

1. Three Directors: A Nidhi corporation must have at least three directors, at least one of whom must be an Indian Citizen and Resident.
2. Seven Promoters: At least seven Promoters are required for a Nidhi firm. It is possible that the Promoter and Director are the same individuals. 
3. Unique Name: The business name must be unique. The proposed name must be identical or similar to any existing companies or trademarks in India. The words “Nidhi Limited” must appear in the Company’s name at the time of incorporation. 
4. Paid-Up Capital: A minimum paid-up equity share capital of Rs. 5 lakhs is required. 
5. Registered Office: The Company must have a physical location. Other Licenses should be obtained at the location.

• Documents for Registered Office:

1. A copy of the most recent bank statement (within the past three months) or a copy of the most recent telephone bill, mobile bill, energy or gas bill (within the last two months) or,
2. Copies of property tax receipts,
3. Notarized rental/lease agreement,
4. Scanned copy of sale deed/property deed,
5. Property owner’s no objection certificate.

• Documents for Indian Directors or Promoters:

1. PAN Card of all the Shareholders and Directors of the Company.
2. A recent passport-sized photograph of the shareholder/director (in jpeg/pdf format). 
3. ID proof such as Voter ID Card/Passport/Driving Licence is acceptable forms of identification. 
4. Proof of Address such as Bank Statement/Recent Electricity/Telephone/Mobile Bill 

NOTE: Please keep in mind that digital signatures are required for all prospective directors and promoters of the firm. It is essential for the incorporation application to be signed. DSC is available online. RegisterKaro support manager will submit the application and provide you with a link to complete the video eKYC verification. To authenticate the application, the applicant would need to record a brief video and enter an OTP.

• Documents for NRI Directors or Promoters:

1. ID proof: Passport/PAN Card, which must be confirmed by the Indian embassy.
2. Address Proof: If the permanent address is in India- Bank Statement/Latest Electricity/Telephone/Mobile Bill: certified by any competent CA/CS or CMA (Practising). 
3. Current abroad address and if the country is a CommonWealth (CW) country: Hague Convention (HC): Notarised by a Public Notary and apostilled by the appropriate government of such country. 
4. Outside of CW or HC: Notarised by a Notary (Public) of such country, with the Notary’s certificate certified by a Diplomatic or Consular Officer.

• Documents for Foreign Nationals:

1. ID proof (Passport/PAN Card) & Address Proof: 
2. Residing in his own country under Hague Convention(HC): Notarised by Public Notary and apostille by the competent authority of such country. 
3. Residing outside his own country and the country where he resides is under the Hague Convention.
4. Option A: Notarised by a Public Notary and apostille by the competent authority of that foreign country. 
5. Option B: Attested by the Embassy of his Country of Origin at the place where he resides. 
6. Residing in his own country under Commonwealth Country (CW): Notarised by Public Notary.

Residing outside his own country and the country where he resides is under Commonwealth Country: 

• Option A: Notarised by the Public Notary of that foreign country. 
• Option B: Attested by the Embassy of his Country of Origin at the place where he resides. 
• Is from a country that is outside the CommonWealth and also not a party to Hague Apostille Convention: Notarised by the Notary (Public) of such country and the certificate of Notary (Public) to be authenticated by a Diplomatic or Consular Officer. All proposed Directors have to submit a list of Indian Companies in which they are interested (i.e. holding 2% or more shares).

Procedure for Nidhi Company Registration in India

Following is the step-by-step procedure for Nidhi Company Registration in India:

• Step 1: Apply for a Digital Signature Certificate (DSC) and Director Identification Number (DIN). Our experts will help you obtain DSC and DIN.
• Step 2: Select a suitable Company Name, and make an application for a Reservation of name.
• Step 3: Draft Memorandum of Association and Articles of Association (MOA & AOA). 
• Step 4: Upload Forms and pay requisite fees and Stamp Duty to the Ministry of Corporate Affairs
• Step 5: Scrutiny of documents by MCA. 
• Step 6: Receipt of Certificate of Incorporation (COI) from MCA.

Annual Compliance of a Nidhi Company

Following are some annual compliances of a Nidhi Company in India:

1. Form NDH-1: This form contains all the information regarding members, loans, deposits, etc., for the complete Financial Year e-Form GNL-2 is used for the submission of the documents with the Registrar.
2. Form NDH-2: This form is filled in case:

• The Company fails to add at least 200 members within 1 year of its incorporation;
• Failure to maintain the NOF to deposit ratio of 1:20.

3. Form NDH-3 (Half-Yearly Return): This form is to be filed with the Registrar of Companies.
4. Form NDH-4: This form is used to file an application for a declaration as Nidhi Company & status updates.
5. Form AOC-4: For filing financial documents & other supporting documents to the RoC.
6. ITR- 6: This is for filing an Income Tax Return.
7. Form MGT-7: This form is used for filing an Annual Return.

Event-Based Compliances of a Nidhi Company in India

These compliances are required to be filed only once during the incorporation process. Following is the list of event-based compliances:

1. Transfer of Shares;
2. Appointment or Resignation or Removal of Director;
3. Any change in the name of the Company;
4. Increase in the Authorised Capital of the Company;
5. Any changes in the Company’s objective;
6. Change in registered office address;
7. Any other changes that are event-based.
8. Appointment of the KMP (Key Managerial Personnel).
9. Increase in the authorized capital of the Company.

What are the Penalties for Non-Compliance?

It is mandatory to complete all the compliances for every Nidhi Company. Non-Compliance attracts penalties for the Nidhi Companies:

1. In case the Company doesn’t meet the compliance, the organisation & the concerned officers will be fined an amount up to Rs. 5000.
2. In the case of repetition of infringement, the company will be fined Rs. 500/day.

Why RegisterKaro?

Experience a hassle-free and efficient process for establishing your business in India. At RegisterKaro, we provide comprehensive assistance and guidance for the registration of Nidhi Companies. Our team of experienced professionals understands the intricacies involved in the Nidhi Company registration process and ensures a smooth and hassle-free experience for our clients.

FAQs

1. What is a Nidhi company?

A Nidhi company is a type of non-banking financial institution (NBFC) recognized under the Companies Act in India. Its primary objective is to promote thrift and savings among its members and provide them with loans and other financial services.

2. Who can register a Nidhi company?

Any Indian citizen or legal entity, such as a company or partnership firm, can register a Nidhi company as long as they meet the eligibility criteria.

3. What are the minimum requirements to register a Nidhi company?

The minimum requirements include having at least seven members, three directors, a minimum paid-up equity share capital of Rs. 5 lakhs, and an address for the registered office.

4. How long does it take to register a Nidhi company?

The registration process usually takes around 30-45 days, depending on the submission of the required documents and the processing time by the Registrar of Companies (ROC).

5. Can a Nidhi company accept deposits from the public?

No, Nidhi companies can only accept deposits from their members. They are not allowed to accept deposits or loans from the general public.

6. Is it mandatory to have the word “Nidhi” in the company name?

Yes, as per the rules, it is mandatory for a Nidhi company to have the word “Nidhi” as part of its name.

7. Are Nidhi companies regulated by any authority?

Yes, Nidhi companies are regulated by the Ministry of Corporate Affairs (MCA) and the Reserve Bank of India (RBI).

8. Can a Nidhi company provide loans to non-members?

No, Nidhi companies can only provide loans or advances to their members. They cannot extend loans to non-members.

9. Can a Nidhi company operate in multiple states?

Yes, a Nidhi company can operate in multiple states, but it needs to have at least one branch within the district of its registered office.

10. Can a Nidhi company engage in any other business activities?

No, Nidhi companies are restricted to carrying out activities related to borrowing and lending within their member base. They cannot engage in any other business activities.

11. What is the maximum interest rate that a Nidhi company can charge on loans?

As per RBI guidelines, Nidhi companies cannot charge an interest rate higher than 7.5% above the highest rate offered on deposits.

12. Is it necessary for the directors of a Nidhi company to be members as well?

Yes, all directors of a Nidhi company must also be members.

13. Can a Nidhi company issue preference shares?

No, Nidhi companies are not allowed to issue preference shares. They can only issue equity shares.

14. Is it possible to convert an existing company into a Nidhi company?

Yes, an existing company can be converted into a Nidhi company by fulfilling the necessary requirements and obtaining approval from the Registrar of Companies.

15. What are the compliance requirements for Nidhi companies?

Nidhi companies need to comply with various regulations related to filing of annual returns, conducting annual general meetings, maintaining proper books of accounts, etc.

16. Can a Nidhi company be voluntarily liquidated?

Yes.