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NIDHI COMPANY

Nidhi Company Registration

Nidhi Company Registration means a public company which is incorporated as a Nidhi Company, whose paid-up equity capital should be Rs. 500000. The objective of Nidhi Company is the cultivation of the habit of thrift and saving amongst the members and receiving deposits from members and lending to members for their mutual benefit.

Nidhi Company Registration is required to company all the requirements as prescribed by the central government and also required to use the word “Nidhi” to the end of its name.

Nidhi Company Registration has no right to open the chit fund account and can-not issue debentures and preference shares. Nidhi Company is a company which is required to comply following requirements within one year from the date of incorporation i.e. Nidhi Company should have at least 10 lac net owned fund and have at least 200 members. Unencumbered term deposits should be at least 10% of outstanding deposits. The ratio of net owned fund to deposits shall not exceed 1:20.

Nidhi Company Registration is required to filled Form NDH-1 and NDH-3, as prescribed in Companies Act, 2013 and A Nidhi, shall not declare dividend exceeding twenty-five per cent or such higher amount as may be specifically approved by the Regional Director.

Basic Features to Read before starting Nidhi Company Registration:

1.Incorporation of Nidhi company:
  • Applicants make an application for name availability through the RUN facility of MCA portal.
  • The proposed directors of Nidhi Company shall obtain CLASS-2 DSC.
  • File E-Form SPICe 32 for the incorporation of Nidhi Company Registration along with following attachments-
    • Memorandum of association
    • Articles of association
    • PAN card of subscribers
    • Id proof of first directors
    • Address proof of the registered office
    • Latest utility bill of registers office.
    • NOC of owners of Registered office
    • Consent and declaration from first directors in form DIR-2
    • Self-declaration from first directors and subscribers in form INC-9.
  • Obtain the certificate of incorporation.
2.Documents required for registration as Nidhi Company:
  • PAN card of all directors.
  • Passport size photograph.
  • Aadhar card/ voter’s identity card of directors.
  • If Property is rented then copy of rent agreement.
  • Electricity/ water bill.
  • If owned property then copies of property papers.
  • NOC from the landlord in case utility bill is on another person’s name.
3.Nidhi company compliances after registration:

On registration of Nidhi Company, there are some post compliances which are required to comply by Nidhi Company to avoid the penalties and cancellation of registration. These are as follows;

  • The minimum number of members is 200.
  • The net owned fund shall not be less than Rs.10 lakhs.
  • Unencumbered deposits of not less than 10% of outstanding deposits.
  • Net owned fund to deposits ratio should be more than 1:20.

Note: Nidhi Company shall comply above all post-registration compliances within one year from the date of incorporation of Nidhi Company. In case, if the company shall not comply then within 30 days from the close of the first financial year apply to the regional director in form NDH-2 for extension of time.

4.Annual filling forms to be filed with ROC:
  • Form NDH-1 (return of statutory compliances) within 90 from the close of the financial year.
  • Form NDH-3 (half-yearly return) within 30 days from the conclusion of each half year.
  • File financial statements in form AOC-4 within 30 days of the annual general meetings.
  • File annual return in form MGT-7 within 60 days of the annual general meeting.
5.Restriction on Nidhi Company:

Some restrictions on Nidhi Company are as below-

  • To undertake the business of hire purchase, chit fund, leasing finance, acquisition securities or insurance.
  • Issue preference shares, debentures or any other debt instrument.
  • Open any current account with its members.
  • Acquire other companies by way of control, share purchase, the composition of the Board of Directors, etc.
  • Carry on any business other than borrowing or lending in its own name.
  • Accept deposit or lend to any person other than its members.
  • Promising any of the assets submitted by the company members as security.
  • Issue or cause to be issued any advertisement in any form for soliciting deposits.
  • To enter into any kind of agreement or pay brokerage to implore any kind of deposits.
  • Accept deposits more than 20 times of its Net Owned Funds as per the last audited balance sheet.
  • Appoint Director for a term of more than 10 consecutive years but eligible for re-appointment after completion of 2 years from ceasing to be director.
  • To issue any type of advertisement.
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Questions

1.What is meaning of Nidhi Company?

Ans. Nidhi Company means a public company which is incorporated as a nidhi company, whose paid up equity capital should be Rs. 500000.

2.What is the purpose of Nidhi Company?

Ans. The purpose of Nidhi Company is cultivation of habit of thrift and saving amongst the members and receiving deposits from members and lending to members for their mutual benefit

3.What is the benefits of Nidhi Company?

Ans. Some important benefits of Nidhi Company are-
  • Nidhi Company has very trouble-free formation.
  • In Nidhi Company does not required RBI approval.
  • In Nidhi Company there is less risk for repayment of loans.
  • Nidhi Company have net owned fund.

4.How many members are required for Nidhi Company?

Ans. At the time of registration minimum 7 members are required but after registration it is compulsory to have minimum 200 members in Nidhi Company.

5.How much capital is required for Nidhi Company?

Ans. For starting up of Nidhi Company minimum paid up capital of 5 lakh is required.

5.How much capital is required for Nidhi Company?

Ans. For starting up of Nidhi Company minimum paid up capital of 5 lakh is required.

6.How many directors are required for Nidhi Company?

Ans. For Nidhi Company minimum 3 directors are required.

7.What are the essential documents required for Nidhi Company?

Ans.Essential documents required for Nidhi Company are-

  • PAN card of all directors.
  • Passport size photograph
  • Aadhar card/ voter’s identity card of directors.
  • If Property is rented then copy of rent agreement.
  • Electricity/ water bill.
  • If owned property then copy of property papers.
  • NOC from landlord in case utility bill is on another person’s name.
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