Nidhi Companies belong to the Non-banking financial companies structure. Registering a Nidhi Company allows a Nidhi to borrow from its members and lend to the members. Nidhi Companies are registered in India are created to cultivate the habit of thrift and savings among its members. The funds that are contributed to a Nidhi Company are only from its members.
For Incorporating a Nidhi Company, no license is required from the Reserve Bank of India. Hence, the formation of the Nidhi Company is easy. Nidhi Companies are registered as Public Companies and should have Nidhi Limited at the last of the name. It should also be noted that the Nidhi Companies fall under the purview of the Reserve Bank of India as the functioning of Nidhi Companies is similar to NBFCs.
To incorporate a Nidhi Company in India, at least seven members are mandatory, out of which three should be the designated directors. However, the Nidhi Company should acquire at least 200 members within one year of commencement.
For registering a Nidhi Company, it is necessary to have a minimum equity share capital of Rs. 5 lakh. But it is to be noted that the Net Owned Funds (NOF) must be increased to Rs 10 lakhs within one year of registration. While Registering as a Nidhi Company in India, it is necessary to first incorporate into a Limited Company under the Companies Act, 2013.
While Nidhi Company Registration, it necessary to ensure that the objective mentioned in the Memorandum of Association is to cultivate the habit of thrift and savings among the members, receiving and lending to its members only for its mutual benefit.
Post incorporation as a Limited Company, the Nidhi Company should meet the following capacities:
The aggregate of paid-up equity capital and free reserves is reduced by the accumulated losses and intangible assets appearing in the last audited balance sheets.
Suppose at the end of one year from commencing, the Nidhi Company cannot meet the above requirement. In that case, the Company may apply to the Regional Director in Form NDH-2 for an extension of time within thirty days close from the first financial year.
Even after the second Financial year the Nidhi Company is unable to meet the requirements for a Nidhi Company. The Nidhi Company should not accept any further deposits from the commencement of the second financial year until it complies with the Provisions for operating as Nidhi Company.
The following documents are required to incorporate a Nidhi Company.
An individual can get Nidhi Company registration by following this 6 step guide.
The first step begins with acquiring the Digital Signature Certificate of the applicants; after the DSC is obtained, the applicant should apply for the Director Identification Number.
Next, the applicant has to make an application to MCA for name approval. The names provided should be unique and should not go against any provisions relating to intellectual property rights.
Once the application is made, the applicant must file prescribed documents to the ROC. The documents must be filed through INC form 32, and along with this, MOA and AOA should be submitted. the applicant has to intimate the main objective of forming the entity while submitting the documents
An incorporation certificate will be provided after reviewing the Incorporation Certificate. This certificate is issued by the registrar within 15 Days.
The next step is when the Nidhi Company is required to apply for PAN and TAN.
This is the final step while Incorporating a Nidhi Company. At this stage, it is necessary to open a Bank account on behalf of the business for any transaction.