What is Nidhi Company Registration in India?
NIDHI stands for National Initiative for Developing and Harnessing Innovations. NIDHI Company is a financial institution or a type of NBFC that is involved in depositing and lending money to its members. This company is registered under the Companies Act, 2013, and is managed, as per the RBI’s guidelines. All the transactions are performed by the company’s members only. Since all the transactions are focused on the shareholders of the Nidhi Company, RBI has exempted the notified Nidhi companies from the core acts of RBI. This differentiates Nidhi companies from other NBFCs. Nidhi companies were started by the Ministry of Corporate Affairs (MCA) and are affiliated with the same. However, some of their decisions are controlled by the MCA.
Eligibility for NIDHI Company Registration
Given below is the eligibility criterion to fulfill before registering as a Nidhi Company:
1. Apart from the core members, Nidhi companies must have a minimum of 200 shareholders of the company. Only when a company has this minimum number of shareholders, they can apply for Nidhi company registration.
2. Any company wanting to register as a Nidhi company must have a minimum of Rs. 10 lakh of net-owned funds. This is necessary for registration and must be followed. Any company having a lesser amount of net-owned funds is not eligible for Nidhi company registration.
3. The ratio between the net-owned funds and the deposits cannot be more than 1:20 for any companies which want to register for Nidhi Company. A ratio more than this is not accepted for a Nidhi company registration.
4. A company that wants to register as Nidhi Company must have a minimum of 10% of unencumbered term deposits of the outstanding deposits. Term deposits of more than 10% are acceptable but any less than 10% is not considered sufficient for Nidhi company registration.
5. The name of the company must always contain ‘Nidhi Limited’.
6. Companies registered under Nidhi company will be a public company.
7. The registering company must have paid equity share capital of Rs. 5 lakh.
Benefits of Registration
Nidhi company registration has several benefits for the people bringing the company together. Some of the major benefits of Nidhi company registration are discussed in detail below:
1. Easy Formation - The formation of a Nidhi company is a simple process. There are very few requirements for the formation of a Nidhi company. Some of the primary things to be kept in mind for the formation are listed below:
- Minimum of 7 members is required. 3 of these 7 members are appointed as directors of Nidhi company
- Aadhaar Card
- Simple and hassle-free documentation process
- Easy-to-do registration
- Even after being a different type of NBFCs, the registration process is comparatively simple for Nidhi companies.
2. No Compliance to RBI - As we suggested above, Nidhi companies do not have to comply with the RBI regulations. This non-compliance gives the company freedom to inculcate better and different rules for its functioning. Complying with RBI’s regulations would have made it difficult for Nidhi companies to formulate their own rules and regulations which is a major point which differentiates them from other NBFCs.
3. Less or No Risk - Since all the lending and depositing transactions are performed by members of the company, it lowers the financial risk taken by the company. In Nidhi companies, only the members are involved with the financial transactions which make it safe and easy to track with the person depositing or borrowing funds from the company.
4. Economical Registration - Nidhi company registration is not heavy on the directors’ pockets. The registration cost is less for Nidhi companies as compared to other types of NBFCs. Even the formation of Nidhi companies is simpler than other types of NBFCs. This acts as a major benefit for the directors since saving money on registration can make it possible for directors to invest money in various business-related activities. This can also help the Nidhi companies to get business loans when required for the growth of the company.
5. Certainty on Savings - The basic objective of Nidhi companies is to promote the culture of savings among the people of India. This objective makes the concept of Nidhi companies certain and trustworthy. Nidhi companies make sure that they will never jeopardize the savings of their members where ever they invest. Savings is an important practice to be inculcated in the individuals of all age groups of the society.
6. Net-owned Funding System - Nidhi companies follow the net-owned funding system. Net-owned funding refers to the transaction where the owner invests an amount in the business to raise funds for the same. In Nidhi companies the ratio of net-owned funding is 1:20, which means if an owners invests Re. 1 in his/her business he/she can raise a fund of Rs 20 for his/her business. This feature of Nidhi companies makes it cost effective for owners to invest in new business ventures and grow their company with more capital and diversify their business.
Documents Required for NIDHI Company Registration
Given below is a list of documents one requires for Nidhi company registration:
- Passport-sized photographs
- No Objection Certificate (NOC) (signed by the landlord/owner)
- Digital Signature (DSC)
- Director Identification Number (DIN) of directors
- Memorandum of Association of the company (MoA)
- Articles of Association of the company (AoA)
- PAN card: This is necessary for the filing of the financial transactions made by the company. PAN card is also necessary for the taxation process of the company
- Address Proof
- Residential Proof
- Passport: Passports are only compulsory for the companies whose director is a foreign national. Passport is not a mandatory document for Indian directors of Nidhi companies
- Registered Office Proof: Registered office proof for Nidhi company registration because of the importance of the same in the issue of government supported schemes and loans
1. Bank Statement
2. Driving License
3. Residence Card
4. Any other Government issued identity proof having the address
1. Mobile Bill
2. Telephone Bill
3. Electricity Bill
4. Bank Statement
It is important to note that Nidhi company registration application can be filled out online. Once the Nidhi company registration fee is fully paid, the registration form is submitted and sent for further processes of approval. Once submitted the Nidhi Company registration process is completed.
How S.K. Agrawal & Co. Helps in Nidhi Company Registration?
With S.K. Agrawal & Co., you can establish your nidhi Company seamlessly. You can register your Nidhi Company in just 4 simple steps:
Step 1: Confirmation Mail Acceptance of our Proposal
Send confirmation mail at our email id regarding acceptance of our Proposal for Registration of Nidhi Company. You can request a callback or directly call to our expert on phone number provided at our website. Our experts will contact you and clear all your queries.
Step 2: Send the Documents on our Email Id
Send below-mentioned documents on our email Id to incorporate/register your Section - 8 Company:
- Passport size photos of directors
- PAN Card or Passport in case of NRIs and Foreign National.
- Address proof of directors
- Specimen signature
- Self-declaration about your directorship in other companies
- Rent agreement of your registered office
- No objection certificate from the owner of the property of the property
The Section - 8 Company registration from S.K. Agrawal & Co. is completely online and thus, you can save time and money as you need not have to visit our office. If you want to visit to our office you are most welcome.
Step 3: Document Verification by our Expert Team and Signature of Documents
Our expert team will verify the documents uploaded by you. You will need to attest your signature on the documents.
Step 4: Our Experts Team will File Forms on the MCA portal to Incorporation Your Company
Our experts team will file the below forms on behalf of you on the MCA portal –
- Digital Signature Certificate Application
- Company Name Reservation
- Filing of e-forms with ROC
After the company forms are filed on the MCA portal, the Registrar of Companies (ROC) and the respective departments will verify the forms submitted by our expert team. The verification process takes around 5-7 days (subject to departmental approval and reverts from the respective departments).
Our expert team will follow up with the respective authorities till you receive the Incorporation Certificate. After the verification process is complete, you will receive the Incorporation Certificate along with PAN and TAN in about 5-7 days.
Service Area
We provide strategic and qualitative advisory services to all our clients from domestic to international organizations, small, medium and large sized enterprises, assisting them with their incorporation and quality management services so they can establish their business successfully globally. To help them deal with their tax issues, financial and legal requirements we provide all support for post incorporation services, so they are able to run their business seamlessly. We are based at New Delhi and Faridabad, but our wings are spread to serve clients across the globe. Customer Satisfaction, Quality of Service and our Turnaround time are the drivers of our enthusiasm and success. We are continuously serving our client at Faridabad, Delhi, Gurgaon (Gurugram), Noida (Gautam Budh Nagar),Ghaziabad, Sonipat, Panipat, Palwal, Jind, Karnal, Meerut, Hapur, Kolkata, Mumbai (Bombay), Pune, Bangalore, Nasik, Aurangabad, Nagpur, Ludhiana, Amritsar, Mohali, Hyderabad, Bareily, Kanpur, Agra ,Mathura, Baddi, Rudrapur, Haridwar, Siliguri, Jamshedpur, Hubli, Bihar and many other Industrial Areas.