• +91 954-880-0459
  • Free enquiry
  • info@ca4globe.com
  • IT Consultant

NIDHI COMPANY REGISTRATION

CA4Globe Testimonial

Admin

+91 976-1000-459
info@ca4globe.com
 Trademark registration

Nidhi Company Registration

“Nidhi” is a Hindi word, which means finance or fund. Nidhi means a company which has been incorporated with the object of developing the habit of thrift and reserve funds amongst its members and also receiving deposits and lending to its members only for their mutual benefit. Nidhi company registration requires minimum 3 members. All the Nidhi company’s incorporated shall have the last word as “Nidhi Limited” as part of its name. Nidhi Company is easy and economical to register. It might not issue preference share. If preference shares have already been issued by a Nidhi Company before initiation of this Act, such preference shares are to be redeemed in accordance with the terms of issue of such shares.

BENEFITS OF NIDHI COMPANY

  • Easy Transfer of Ownership
  • Tax Benefits
  • Clear Objectives for easy donations and loans
  • Easy to Manage
  • Exemptions and Privileges under Companies Act, 2013
  • Relaxation in Compliances Documents required for registration
  • Documents required for incorporation

  • Proof of the registered place of business (Ownership documents/ rent or lease agreement)
  • No Objection Certificate (signed by the owner/ landlord)
  • Identity proofs
  • Address proofs of the members
  • Photos of the members
  • PAN card copies of the members
  • Digital Signature (DSC)
  • Director Identification Number (DIN) of the directors
  • Memorandum of Association of the company (MoA)
  • Articles of Association of the company (AoA)
  • Only one object will be mentioned in MoA of the company: “cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.

    MINIMUM REQUIREMENT FOR INCORPORATION

    Before Incorporation

  • Minimum 7 shareholders
  • Minimum 3 Directors
  • Minimum Capital of Rs. 5 lacs
  • DIN for all directors
  • After Incorporation

  • Minimum members must not be less than 200.
  • The ratio between net owned funds and deposits must not be more than 1:20.
  • No body corporate or trust must be admitted to it as its member.
  • STEPS TO INCOPORATE NIDHI COMPANY

    The company should fulfil all the minimum requirements to register a Nidhi Company like:

  • Minimum 7 members
  • Document requirement
  • Minimum capital requirement
  • Share Capital and Owners’ Funds
  • A minimum of 5 lakh rupees, is required as the equity share capital to start a Nidhi Company. Nidhi Company can’t issue preference shares.
  • Choose directors:A minimum of 3 directors must be chosen by the company and it must be done wisely, for the directors run the company.
  • Application of DSC & DPIN:First of all, the partners have to apply for Digital signature and DPIN for Nidhi company. Digital signature is an online signature used of filing and DPIN refer to Directors PIN number issued by MCA. If the directors already have DSC and DPIN, then this step can be skipped.
  • Name approval:You have to provide 3 different name options for Nidhi company to MCA of which one will be selected. Names provided should ideally be unique and suggestive of company business.
  • MOA & AOA submission:-Once the name is approved, one needs to draft Memorandum of association and Articles of Associate. But the object of the Nidhi company must always be a charitable object. Both MOA and AOA are filed with the MCA with the subscription statement.
  • Get incorporation certificate-:It typically takes 15- 25 days to form a Nidhi company and get the incorporation certificate. Incorporation certification is a proof that company has been creation. It also includes your CIN number.
  • Apply for PAN, TAN and Bank account:Then you need to apply for PAN and TAN. PAN and TAN are received in 7 working days. Post this, you can submit the Incorporation certificate, MOA, AOA and PAN with bank to open your bank account.
  • Conditions to be fulfilled for getting ‘NIDHI’ status

  • Within one year of its registration Nidhi Company should have minimum 200 members within one year from commencement
  • Also, the net owned fundsshould be 10 lakh rupees or more. Net owned funds = Equity share capital + free reserves (-) accumulated losses (-) intangible assets
  • Unencumbered term deposits must be 10% or higher of the outstanding deposits
  • The ratio of net owned funds to deposits shouldn’t be more than 1:20
  • If Nidhi Company satisfies all above conditions, it should file NDH-1 along with prescribed fees within 90 days from the end of the first financial year after incorporation. The form must be duly certified by practicing CA/ CS/ CWA.
  • 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 even after the second financial year, it doesn’t fulfill the requirements, it can’t accept deposits till it complies with the provisions, and also penalty will be imposed.