Nidhi Company Registration
Starting a finance business or want to legalize your existing finance business, then you are at the right door as Nidhi Company is the only available option to start a finance business legally that too without the Reserve Bank approval.
What is a Nidhi Company?
Nidhi Company is one of the category of Non Banking Financial Company (NBFC) which does not require any Reserve Bank of India (RBI) license. Nidhi Company works through its members. It can accept deposits and lends loans to its members only.
The companies doing Nidhi business, viz. borrowing from members and lending to members only, are known under different names such as Nidhi, Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. Nidhis are more popular in South India and are highly localized single office institutions
Easy of Formation
Unlike other NBFCs, Nidhis don’t have to obtain a license from RBI. They just have to incorporate themselves as a public company with the MCA with the required capital as per Nidhi Rules 2014
Lower Rate of Credit
The loans given to the members are at a lower rate of interest than the market rate. This brings greater savings to the members.
Separate Legal entity
A Nidhi Company is a legal entity and a juristic person established under the Act. Therefore, a Nidhi company has wide legal capacity and can own property and also incur debts.
Channelizing small savings
The main aim of such companies is to promote the habit of saving and thrifts among lower and middle section of the society.
A Nidhi company has ‘perpetual succession’, that is uninterrupted existence until it is legally dissolved. A Nidhi company is unaffected by the death or other departure of any member.
Personal assets of the shareholders will not be at risk, in the event of the company facing financial distress. Liability of the shareholder is limited to the unpaid amount on his shareholding
Prerequisites for Incorporation of Nidhi Company
Benefit of Members
The objective of such a firm would be to imbibe in the members a habit of thrift and saving and the services would only be restricted to its members.
Minimum Required Capital
A minimum capital of Rs. 5,00,000 is required to incorporate a Nidhi Company.
A Nidhi company has to be a public company
What are the Documents required for Formation of Nidhi Company?
PAN card and Residence Proof of directors of the company
Copy of Rental Agreement / EB Card Copy of Registered Office
Copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
Passport-size Photograph of the Directors
Specimen signature (blank document with signature [directors only])
Copy of Passport (In case of Foreign Director
What Includes in this package?
Verification of Documents
Drafting MOA & AOA
DSC and DIN for 2 Directors
Following until Certificate is allotted
Name approval and ROC fees
Applying PAN & TAN
What is the process for Private Limited Company Registration?
MOA, AOA & AFFIDAVIT
Memorandum and Articles of Association should be drafted. Affidavit and declaration by first subscribers and Directors should be prepared.
Once the application is duly filed and accepted by ROC, certificate of incorporation is issued and the company is all set to start it’s operations.
4-6 proposed names should be provided that should be unique and suggestive of company business.
Apply for PAN, TAN and Bank accounts
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 a bank to open your bank account.
Applying DIN & DSC
DSC and DIN for all directors are required.