What is Nidhi Company?

An Nidhi Company is a Non-Banking Financial Company or NBFC registered in India. Nidhi company is incorporated as a public limited company and it ought to have “Nidhi Limited” added in its name at the end.  Nidhi Company is registered under Section 406 of the Companies Act 2013. It is incorporated to grant borrowing and lending services to its members. It promotes the habit of saving money inside the members. 

Nidhi Company works on the formula of shared benefits for all members. Nidhi Company is also called as Mutual benefits, Benefit funds, and Mutual Benefit Funds company. The MCA regulates Nidhi organizations. The RBI issues instructions and directives related to deposit accepting terms. Nidhi companies are popular in southern India compared to other states. 

A banking or NBFC license from the Reserve Bank of India (RBI) is not required for a Nidhi Company registration hence it is easy to form a Nidhi Company. The primary function of registering a nidhi company is to provide facility of lending and borrowing money between the nidhi members .

 A Nidhi Company is not allowed to carry business of securities, insurance schemes, chit funds, leasing, finance business. It is restricted from accepting deposits from or lending funds to persons who are not its members. Minimum 7 members are required to incorporate a Nidhi Company out of which 3 shall act as director of NIdhi company  incorporated. 

Nidhi Company Registration takes 15-20 days to complete. The Nidhi Company Registration process is similar to other forms of company registration. Nidhi companies also offer their members lockers facility on rent. 

Nidhi Company Registration Information

Nidhi Company registration falls under the purview of the Section 406 of Companies Act, 2013 in India. If you’re looking for information on registering a Nidhi Company, the best option is to refer to the official website of the Ministry of Corporate Affairs (MCA). Including the MCA website other sources of information of Nidhi company can be following:

  • Ministry of Corporate Affairs (MCA) Website: The official website of MCA provides the most updated, accurate and comprehensive information on Nidhi Company registration process, forms, and guidelines. It acts as a one stop solution for information on all kinds of company registration. 
  • Professional Consultants: The second best option could be engaging professional consultants like Chartered Accountants/Company Secretary etc. who can provide expert guidance, assist with the documentation and provide other required assistance throughout the Nidhi registration process. They will charge a fee for their consultation and registration services. CA/CS also help with Nidhi compliance requirements. 
  • Lawyers: Certain lawyers and law firms can also assist with Nidhi company registration and legal requirements
  • Existing Nidhi Companies: What could be a better option to seek advice and guidance on Nidhi company formation other than members and directors of existing nidhi companies who are operating Nidhi companies for many years. They can also provide not all registration information but also provide insights about Nidhi company operations and compliance requirements. 
  • Online Portals: Various online portals and forums like Apkatax offer valuable resources, articles, and guides on Nidhi Company registration. Apart from that Apkatax offers Nidhi company registration services and also fulfills Nidhi company compliance requirements. 
  • Legal Publications: Legal publications and journals also provide insights into recent developments and case studies related to Nidhi Companies periodically and in special issues as well. 

For detailed guidance and specific requirements, it’s advisable to consult with a legal advisor or chartered accountant familiar with company registration procedures in India. Additionally, you can refer to resources such as the MCA website, which provides forms, guidelines, and updates related to company registration processes.

FAQ’s

  1.  How long does it take to complete the registration process for a Nidhi Company?

The registration process for a Nidhi Company typically takes around 30 to 45 days, depending on the efficiency of document preparation, submission, and verification by the authorities involved.

  1. Where can I find reliable information and guidance on Nidhi Company registration in India?

You can find reliable information and guidance on Nidhi Company registration from the official website of the Ministry of Corporate Affairs (MCA), professional consultants or chartered accountants specializing in company registration, online portals offering resources and guides on legal procedures, and legal publications providing insights into recent developments and case studies related to Nidhi Companies.

  1. What is a Nidhi Company, and what are its primary objectives?

A Nidhi Company is a type of non-banking financial institution operating under Section 406 of the Companies Act, 2013. Its primary objectives include promoting the habit of thrift and savings among its members and facilitating easy borrowing and lending within the group.

  1. What are the eligibility criteria for starting a Nidhi Company in India?

To start a Nidhi Company, you need a minimum of 7 members, out of which 3 of them must be designated as directors. A capital requirement of at least INR 5 lakhs, incorporation as a public company under the Companies Act, 2013, and compliance with the guidelines specified by the Ministry of Corporate Affairs (MCA).

  1. What is the registration process for establishing a Nidhi Company?

The registration process involves obtaining Digital Signature Certificates (DSC) for directors, applying for Director Identification Numbers (DIN), reserving the company name, drafting Memorandum and Articles of Association, filing incorporation documents with the Registrar of Companies (ROC), paying requisite fees, and obtaining the Certificate of Incorporation from the ROC.

  1. What are the documents needed for Nidhi Company registration?

Documents required for Nidhi Company registration includes Memorandum of Association (MOA) and Articles of Association (AOA), identity proof and address proof of directors and shareholders, PAN card and Aadhaar card of directors and shareholders, residential proof of the registered office, No Objection Certificate (NOC) from the landlord if premises is rented, and declarations from directors regarding compliance with Nidhi Rules, 2014.

  1. What are the regulatory compliance requirements for Nidhi Companies post-incorporation?

Nidhi Companies are required to maintain registers such as Membership Register, Share Register, Loan Register, etc., and must adhere to annual compliance requirements- filing of financial statements and annual returns with the ROC, refrain from engaging in certain prohibited activities such as trading and chit fund schemes etc.