What is Nidhi Company?
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A Nidhi Company or Mutual Benefit Society/Fund or any other name by which you may know it,is a company created for the mutual benefit of its members.This mutual benefit comes from group lending and borrowing.
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Within these companies the members make deposits and these deposits are used to give secured loans to the members at a reasonable interest rate.The basic idea of a nidhi company is to save its members from the exploitation of money lenders who charge high interest rates.
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By becoming members of Nidhi’s people develop habit of savings and self-reliance .
Background or history
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Long before the financial institutions were regulated and proper financial framework was established ,idea of group lending and borrowing existed but not by the same name or in the same way as it exist today as Nidhi Company.
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In Hindi, Nidhi refers to finance, treasure or fund. Nidhi’s used to grant secured loans against tangible assets for personal purposes like family functions, marriages, medical issues, education, property purchase, etc.
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Why Nidhi Company should be registered?
A registered Mutual Benefit Society has various advantages. Such as:-
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Limited Liability: The members have limited liability which is extended up to the amount they have contributed or invested in the company. They are liable only for their share in the company. Personal Assets are beyond the reach of liability. They cannot be utilized for meeting the liability of the company.
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Availability of funds : Funds contributed by members is available for the members themselves at lower interest rates.
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Legal Existence : A registered Mutual Benefit Society enjoys separate legal existence. The members and the company are different. The company can buy, sale, or acquire assets in its own name, it can also incur debt in its own name, also it can sue or be sued in its own name.
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How to register/incorporate a Nidhi Company?
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Incorporate a Public Ltd. Company with minimum paid up equity share capital of Rs. 5,00,000 with the sole object of lending and borrowing within the members.
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Company must be incorporated with ‘Nidhi Ltd.’ as last words in their name.
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Company should ensure that it has minimum 200 members,Rs. 10,00,000 or more of Net Owned Funds, maximum ratio of N.O.F to Deposit 1:20,debt free term deposits of not less than 10% of the outstanding deposits, etc. Company is then required to file after the close of the first financial year NDH-1 or NDH-2 within 90 days or 30 days with ROC or RD respectively.
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Get complete details about registration of Nidhi company or contact +918750008585 for consultancy.
MCA on 31st March 2014 notified about Nidhi Rules under which Nidhi Companies are regulated. These rules deals with Share capital and allotment, Membership, Net owned funds, Branches, Rules relating to Directors, Auditor, Loans, Un-encumbered term deposits of Nidhi companies, Acceptance of deposits, Payment of dividend by this companies, etc.
Complete Nidhi Rules, 2014 can be found here.
List of Nidhi Companies is also provided.
Documents Required For Nidhi Company
Pan CardPan Card
ID Proof (Any one of the following)Electricity Bill
Telephone Bill
Mobile Bill
Bank Statement
ID Proof (Any one of the following)Voter ID
Aadhaar Card
Passport
Driving License
FAQs
Every Nidhi shall ensure that it has—
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Not less than 200 members.
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Net Owned Funds of Rs.10 lakhs or more.
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Debt free term deposits of not less than 10% of the outstanding deposits.
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Ratio of Net Owned Funds to deposits of not more than 1:20.
Minimum of 3 and maximum of 15 Directors are necessary for Nidhi Limited Company Registration.
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Every Nidhi Company is required to be incorporated as Public Ltd. with the words ‘Nidhi Ltd.’ in last as part of its name.
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Minimum paid up equity share capital of Rs. 5,00,000 should be there.
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Preference shares must not be issued on or after incorporation.Preference shares ,if,had already been issued by a Nidhi Company before such preference shares are to be redeemed according to terms of issue of such shares.
After the incorporation, within 1 year from the commencement, the Nidhi Company must satisfy all of the following criteria
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Not less than 200 members.
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Net Owned Funds of Rs.10 lakhs or more.
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Debt free term deposits of not less than 10% of the outstanding deposits.
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Net Owned Funds to deposits ratio of not more than 1:20.
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Minimum paid up equity share capital of Rs. 5,00,000 should be there
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Maximum no limit.
Usually 30-40 working days,after you have provided all your Documents and Information to us.Your company is located in Delhi (Pitampura), I am in a different state. Can I register a company through you?
Yes, you can easily do it.The company incorporation process is on-line.Just provide us the documents and information.
No, no body corporate nor a company can become a member of Nidhi. Only INDIVIDUALS can be members of a Nidhi.
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Pan Card
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ID proof- Any one (Voter ID / Driving License / Passport/ Aadhar Card)
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Address Proof- Any one ( Mobile Bill /Electricity Bill / Bank Statement/ Telephone Bill ).
It will be valid for eternity if it comply with all the rules.If rules are not complied with,the Company will become a Dormant Company and may be its name would be cut from the register.
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Only if it has earned net profits after tax continuously during the last 3 financial years.
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Maximum of 3 branches can be opened within the district.
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For opening more branches approval of RD and intimation to ROC within 30 days of opening is required.
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Nidhi is not allowed to open branches outside the State where its registered office is situated.
No,you cannot. Nidhis belong to NBFC. No nidhi can engage in the business of finance.
Any person can become a director.There is no restriction regarding this.
There are no separate restrictions particularly for Nidhi’s besides that their name should end with ‘Nidhi Ltd’.
We have tried to answer as many FAQs as we can covering most of the doubts.Still if you have any doubt or query regarding Registration of Nidhi Company, feel free to contact us.
Documents Required For Nidhi Company
Pan Card
Pan Card
ID Proof (Any one of the following)
Electricity Bill
Telephone Bill
Mobile Bill
Bank Statement
ID Proof (Any one of the following)
Voter ID
Aadhaar Card
Passport
Driving License
FAQs
Every Nidhi shall ensure that it has—
-
Not less than 200 members.
-
Net Owned Funds of Rs.10 lakhs or more.
-
Debt free term deposits of not less than 10% of the outstanding deposits.
-
Ratio of Net Owned Funds to deposits of not more than 1:20.
Minimum of 3 and maximum of 15 Directors are necessary for Nidhi Limited Company Registration.
-
Every Nidhi Company is required to be incorporated as Public Ltd. with the words ‘Nidhi Ltd.’ in last as part of its name.
-
Minimum paid up equity share capital of Rs. 5,00,000 should be there.
-
Preference shares must not be issued on or after incorporation.Preference shares ,if,had already been issued by a Nidhi Company before such preference shares are to be redeemed according to terms of issue of such shares.
After the incorporation, within 1 year from the commencement, the Nidhi Company must satisfy all of the following criteria
-
Not less than 200 members.
-
Net Owned Funds of Rs.10 lakhs or more.
-
Debt free term deposits of not less than 10% of the outstanding deposits.
-
Net Owned Funds to deposits ratio of not more than 1:20.
-
Minimum paid up equity share capital of Rs. 5,00,000 should be there
-
Maximum no limit.
Usually 30-40 working days,after you have provided all your Documents and Information to us.Your company is located in Delhi (Pitampura), I am in a different state. Can I register a company through you?
Yes, you can easily do it.The company incorporation process is on-line.Just provide us the documents and information.
No, no body corporate nor a company can become a member of Nidhi. Only INDIVIDUALS can be members of a Nidhi.
-
Pan Card
-
ID proof- Any one (Voter ID / Driving License / Passport/ Aadhar Card)
-
Address Proof- Any one ( Mobile Bill /Electricity Bill / Bank Statement/ Telephone Bill ).
It will be valid for eternity if it comply with all the rules.If rules are not complied with,the Company will become a Dormant Company and may be its name would be cut from the register.
-
Only if it has earned net profits after tax continuously during the last 3 financial years.
-
Maximum of 3 branches can be opened within the district.
-
For opening more branches approval of RD and intimation to ROC within 30 days of opening is required.
-
Nidhi is not allowed to open branches outside the State where its registered office is situated.
No,you cannot. Nidhis belong to NBFC. No nidhi can engage in the business of finance.
Any person can become a director.There is no restriction regarding this.
There are no separate restrictions particularly for Nidhi’s besides that their name should end with ‘Nidhi Ltd’.
We have tried to answer as many FAQs as we can covering most of the doubts.Still if you have any doubt or query regarding Registration of Nidhi Company, feel free to contact us.
