Nidhi Company Registration in India

Nidhi Company Registration in India

Nidhi Company Registration in India

Are you planning to start a financial company in India that deals with borrowing and lending money? If yes, then registering as a Nidhi company can be a good option. In this blog post, we will provide you with a comprehensive guide to Nidhi company registration in India.

 

What is a Nidhi company?

A Nidhi company is a non-banking financial company (NBFC) that is created for the purpose of cultivating the habit of thrift and savings among its members. The word “Nidhi” means treasure or wealth, and Nidhi companies function as a kind of savings and credit cooperative.

Nidhi companies are regulated by the Ministry of Corporate Affairs (MCA) and governed by the Nidhi Rules, 2014. They are specifically designed to cater to the needs of small investors and savers who wish to avail themselves of credit facilities or invest their savings.

 

Eligibility Criteria for Nidhi Company Registration

To be eligible for Nidhi company registration in India, you must fulfil the following conditions:

  1. Company Structure: A Nidhi company must be registered as a public company under the Companies Act, 2013, and have a minimum of 7 shareholders and 3 directors.
  2. Capital Requirement: The minimum paid-up equity share capital required for Nidhi company registration is INR 5 lakhs.
  3. Object Clause: The primary objective of a Nidhi company should be to cultivate the habit of thrift and savings among its members, and to accept deposits and lend money to its members.
  4. Name of the Company: The name of the Nidhi company must end with the word “Nidhi Limited”.
  5. Registered Office: The registered office of the company must be in India, and proof of ownership or lease agreement of the premises must be provided.
  6. Compliance Requirement: The company must comply with all the regulatory requirements specified by the MCA.

 

Steps for Nidhi Company Registration in India

The process for Nidhi company registration in India can be divided into the following steps:

  1. Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN): The first step in the registration process is to obtain a digital signature certificate (DSC) and director identification number (DIN) for all the proposed directors of the company.
  2. Name Reservation: The next step is to apply for a name reservation for the Nidhi company through the RUN (Reserve Unique Name) service provided by the MCA. You can submit up to 2 name options in order of preference.
  3. Incorporation Documents: Once the name is approved, the next step is to prepare and file the incorporation documents, including the Memorandum of Association (MOA) and Articles of Association (AOA), with the Registrar of Companies (ROC).
  4. PAN and TAN Application: After the company is incorporated, you need to apply for a permanent account number (PAN) and a tax deduction and collection account number (TAN) for the company.
  5. Bank Account Opening: Once you have obtained the PAN and TAN, you can open a bank account for the Nidhi company.

 

Commencement of Business: After the bank account is opened, you need to file a declaration of commencement of business with the ROC within 180 days of incorporation.

  • Documents Required for Nidhi Company Registration in India
  • The following documents are required for Nidhi company registration in India:
  • Identity proof and address proof of all proposed directors and shareholders, including PAN and Aadhaar cards
  • registered office proof, such as a rental agreement or proof of ownership of premises.
  • Memorandum of Association (MOA)Articles of Association (AOA)
  • Proof of minimum paid-up capital of INR 5 lakhs
  • No-objection certificate from the owner of the registered office premises
  • Bank statements and utility bills in the name of the registered office
  • Digital signature certificate (DSC) for all proposed directors
  • Director Identification Number (DIN) for all proposed directors

 

Benefits of Nidhi Company Registration

There are several benefits to registering your financial company as a Nidhi company, including:

Ease of Registration: The registration process for Nidhi companies is relatively straightforward, and the compliance requirements are minimal compared to other types of NBFCs.

Limited Liability: The liability of the members of a Nidhi company is limited to the amount of their shareholding, which provides protection to investors.

Tax Benefits: Nidhi companies enjoy several tax benefits, including exemption from dividend distribution tax and lower tax rates compared to other NBFCs.

Credit Facility: Nidhi companies can provide credit facilities to their members at a lower interest rate compared to traditional banks.

Source of Investment: Nidhi companies can raise funds from their members through the issuance of shares and deposits, providing a reliable source of investment.

 

Conclusion

In conclusion, registering your financial company as a Nidhi company can be a good option if you are looking to cater to the needs of small investors and savers. The process of Nidhi company registration is relatively simple, and the compliance requirements are minimal compared to other types of NBFCs. However, it is important to ensure that you fulfil all the eligibility criteria and comply with all the regulatory requirements specified by the MCA to avoid any legal issues. If you need any assistance with Nidhi company registration in India, NeuSource Startup Minds India Ltd can help you navigate the process and ensure a smooth and hassle-free registration.

13 May

Santosh Dantani
Santosh Dantani

To start a new business is easy, but to make it successful is difficult . So For success, choose the best." Be compliant and proactive from the beginning and choose NEUSOURCE as your guidance partner.

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