A Nidhi Company is basically an NBFC (Non-Banking Financial Company). The word ‘Nidhi’ means funds — it is a Hindi word. In India, Section 406 of the Companies Act 2013 and the Companies (Nidhi Companies) Rules, 2014 govern the incorporation process of a Nidhi Company. Nidhi Companies deal with lending and borrowing of funds among their members — they can lend money only to their members. In South India, such types of companies are more in vogue. RBI has been discretionarily empowered in India to issue directions to such companies for matters relating to acceptance of deposits from members. Nidhi Companies are not allowed to accept deposits from anyone other than their members.
Requirements for Incorporation of a Nidhi Company
Requisites Before Incorporation
- Members: Minimum 7 members are required
- Directors: Minimum 3 directors
- Capital: Minimum capital required to start a Nidhi Company is ₹10,00,000
- DIN: For 3 members
- DSC: Digital Signature Certificate for 3 directors
Requisites After Incorporation
- Minimum members: 200 members
- Net owned funds: ₹10,00,000
- Minimum net owned funds to deposit ratio: 1:20
Advantages of Incorporating a Nidhi Company
- Less legal compliance with the Registrar of Companies
- The liability of such a company is limited
- Taxation benefits
- Minimum documentation and formalities for loans
- Loans are lent or borrowed only between members of the company
Documents Required
ID Proof (For Members)
- PAN Card
- Passport
- Voter ID
- Aadhaar Card
- Driving License
Address Proof
- Bank statement
- Telephone bill
- Mobile bill
- Electricity bill
Note: As per Companies Incorporation Rules, the telephone bill, mobile bill or electricity bill shall not be older than 2 months (it should be latest).
Proof of Place of Business (If Rented)
- Rent agreement and NOC from landlord is required
Proof of Place of Business (If Owned)
- Electricity bills or Index II is sufficient
What We Offer
- Name Approval
- Certificate of Incorporation
- AOA & MOA
- PAN Registration
- TAN Registration
- Digital Signature
Procedure for Incorporation of a Nidhi Company
- Digital Signature — DSC for directors is mandatory.
- DIN Application — Making an online application to obtain the DIN, i.e. Director Identification Number.
- Name Approval — Making an application for the proposed name of the Nidhi Company from options given by the directors.
- Submission of Documents — We prepare all the documents on your behalf, file them with the Registrar of Companies, and take routine follow-up with the officers.
- Start Up the Company — Once the Certificate of Incorporation is obtained, the directors can commence business.
FAQ – Nidhi Company Registration
What is a Nidhi Company?
A Nidhi Company is a company similar to an NBFC (Non-Banking Financial Company), but the major difference is that it lends money only to its members and borrows money only from its members. It can also accept deposits only from its members.
How many members are required for incorporation of a Nidhi Company?
Minimum 7 members are required to incorporate a Nidhi Company, of which at least 3 should be directors.
Who is the governing authority for Nidhi Companies in India?
Nidhi Companies fall under the ambit of two governing laws:
- Companies Act, 2013 & Companies (Nidhi Companies) Rules, 2014
- RBI directives governing NBFCs (Non-Banking Financial Companies)
After incorporation of a Nidhi Company, are there any other requirements?
Within a period of one year from the date of incorporation, a Nidhi Company must:
- Have at least 200 members
- Have minimum Net Owned Funds (NOF) of ₹10,00,000
Are there any statutory compliances for a Nidhi Company with the Ministry of Corporate Affairs?
Yes. Statutory compliance returns are required to be filed in form NDH-1, and a half-yearly return in form NDH-3.
More Questions? Seek Help of an Expert — Call us at: +91 80555 66789 or Email us: office@anbca.com
