NIDHI COMPANY

Nidhi Company is a form of Non-Banking Financial Company (NBFC). It is made to borrow as well as for lending money to its members. It instructs the habit of saving amongst its members and acts on the principle of mutual benefit. Nidhi Company is not required to obtain the license from Reserve Bank of India (RBI), and thus it is easy to be formed.  It is registered as a public company and must have “Nidhi Limited” as the last words of its name.

The interest that is charged at the loans under a Nidhi Company is reasonable. The lending and borrowing of the Nidhi Companies are carried out by its members only. Thus, such corporations are also referred to as Mutual Benefit Societies, because they work for the mutual benefit and welfare of every member.

Advantages of Nidhi Company:

• Easy Access of Public Funds
• Micro Banking
• Simple Processing
• Separate Entity
• Better Credit Co-operative Society

Checklists of documents required for Registration of Nidhi Company:

• Copy of PAN card for Indian Nationals
• Notarized and / or apostilled passport copy for Foreign Nationals
• Passport / Voter ID / Driving license
• Passport size photographs of all individuals
• Copy of Telephone / Mobile / Electricity bill / Bank statements (less than 2 months old) of Directors 
• Electricity / Gas bill (Less than 2 months old) for office premises       
• In case of rented premises a notarized copy of Rent Agreement with a No Objection Certificate (NOC) for conducting business
• In the case of self-owned premises registered title document
• Mobile no, email id of each Director / shareholder
• Shareholding pattern

Nidhi Company Requirements:

• Minimum number of shareholders or members – 7
• Minimum number of Directors - 3
• The minimum capital requirement is of Rs. 5 lakhs
• Minimum 3 Directors.
• By the end of the 1st year, the number of members or shareholders of the Nidhi Company must be 200 at least.
• Net Owned Funds (NOF) should be more than Rs. 10 lakhs.
• The ratio for Net owned funds to deposits should not be more than 1:20
• Unencumbered term deposits should exceed 10% of outstanding deposits

Registration Process 

1. Name approval:  

• Name for Company is applied through simple web based form. We can apply for total four names - Two names at a time followed with one resubmission chance.
• Name is available for 20 days from the date of approval. 

2. Obtaing DSC: 

• After applying for name, next step is to apply for digital signature of all directors/shareholders. 

3. Preparation of Spice forms 

• After collection of all the necessary documents and signing them by directors, the next step is to fill the spice forms, attach all the attachments, affix DSC and submit it on MCA portal. 

4. Allotment of Certificate of Incorporation (COI) with PAN/TAN 

• The MCA will issue COI if all the documents are in order as required or else will raise objection requiring correction and resubmission. 
• However, PAN and TAN are issued with COI of Company. 

5. Certificate of Commencement of Business:

•  Every Company within 180 days of its incorporation has to file Certificate of Commencement of Business with MCA to commence business.