Overview
A Nidhi Company is a non-banking financial company (NBFC) that runs under the regulatory framework of the Nidhi Rules, 2014. It is regulated by Section 406 of the Companies Act, 2013. The main objective of Nidhi Company registration is to encourage thrift and savings among its members and facilitating financial assistance via lending.
What is a Nidhi Company registration?
A Nidhi Company mainly deals in lending loans and managing deposits of its members. Nidhi Companies in India have many exemptions in taxes and regulatory compliances that is why it is most preferred structure for managing community funds. It is formed to provide the benefits of its members. Nidhi Company registration process in India is governed by Section 406 of the Companies Act, 2013, the Companies (Nidhi Companies) Rules of 2014, and Chapter XXVI of the Companies Rules, 2014.
Benefits Of Nidhi Company Registration
Here are the benefits of registration of the Nidhi Company
Not Required RBI Approval: NIDHI Company need not to get RBI clearance to start operations. Although it comes within the category of NBFC. NIDHI Companies are registered with the Ministry of Corporate Affairs as a Public Limited Company. After Nidhi Company registration, you need to comply with the Companies Rules of 2014 and the Companies Act of 2013. With respect to the RBI rules, they are exempted from many regulations. These are the reasons people in India prefer registering a NIDHI company.
Less Capital Requirement: You need not to have hefty amount for a NIDHI Company registration in India. Nidhi Company registration online is cost-efficient to register a NIDHI Company as compared to a NBFC. You need to have an amount of Rs. 10, 00,000 lakhs to register a NIDHI Company.
Separate Legal Entity: Nidhi Company enjoy the status of a distinct legal entity from its members or shareholders.
Perpetual Succession: Company’s existence is remain intact irrespective of any change in its management. Even the death or insolvency of its shareholders does not have any effect on the very existence of the Nidhi Company registration.
Limited Liability of Members: The liability of members of a NIDHI Company is limited to the amount of their share capital in the company.
Minimum Risk of Non-Repayment of Loan: Nidhi Company only lends money to its members and manages deposits of them, it lowers the risk of loan non-repayment, which is not the case for Non-Banking Finance Companies. There will be no external interference in the operation of the NIDHI Company since all financial transactions in a NIDHI Company are limited to its members only.
Documents Required for Nidhi company registration
Below is the list of some essential documents for registration
- Proof of the registered office of the company (Ownership documents/ rent or lease agreement)
- No Objection Certificate signed by the owner, in case of rented property
- Identity proof of the members
- Address proof of the members
- Passport size Photos of the members
- PAN cards of the members are also required for Nidhi company registration
- Digital Signature (DSC) of the members
- Director Identification Number (DIN) of the directors
- Memorandum of Association of the company (MoA)
- Articles of Association of the company (AoA)
Nidhi Company Registration Process In India
We are mentioning the complete process of Nidhi Company registration
Obtain DIN and DSC
All directors of the company need to apply for DIN (Director’s Identification Number) and DSC (Digital Signature Certificate).
DIN is issued by the MCA. DSC is a digital signature that is used in all e-filing process. If all the directors already have DIN and DSC, then no need to apply for it for Nidhi company registration.
Approval Of Name of The Company
You need to submit 3 distinct names to MCA for your Nidhi Company. Only one name will be selected by the MCA. The proposed names of the Company must be unique and not identical to the names of any existing company.
MoA & AoA
These must specify the main motive of a Nidhi company registration. The MoA and AoA are to be filed with the ROC (Registrar of Companies) along with a subscription statement.
Certificate of Incorporation
It takes between 15-25 days to register a Nidhi company, and to get the incorporation certificate. This certificate proclaims that an organization has been created and it specifies the company identification number (CIN).
PAN, TAN and Bank Account
Finally, you need to obtain both PAN and TAN for Nidhi company registration. The PAN and TAN are usually received within 7 working days. After that, you need to get a bank account in the name of the company by submitting the Certificate of Incorporation, MoA, AoA, and PAN to the bank.
After completing all the process mentioned above, you will be eligible to run a Nidhi Company.
Proprietorship Registration
