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Nidhi Company Registration

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Most of the investment companies in India cater to a large amount of money, whereas banks provide very little scope for growth in savings. Nidhi Company provides the most effective and easy way to save your money with a wide scope of monetary growth.

What is Nidhi Company?

Nidhi Company is a type of Non-Banking Financial Company (NBFC). Its major function is lending and borrowing money to its members. The objective is to cultivate the habit of savings amongst its members and work on the principle of mutual benefits that are regulated by the Ministry of Corporate Affairs.

Nidhi Company is not required to receive the license from Reserve Bank of India (RBI), hence it is very easy and convenient to form. It is also known as Mutual Benefit Finance Company. It is registered as a public company and must include “Nidhi Limited” as the last words of its name.

Benefits of Nidhi Company

Advantages of Private Limited Company Registration
  1. Inculcates the habit of savings:The sole objective of Nidhi company is to promote the culture of savings among its members.
  2. Few RBI guidelines:Nidhi company falls under NBFC category, but it does not require approval of Reserve Bank of India.
  3. Limited Liability:As per the Companies Act, 2013, directors and shareholders have limited liability. If the company suffers any losses or issues, personal assets of the directors and shareholders are secure.
  4. Separate Legal Entity:Nidhi Company is a separate legal entity which means it can acquire assets and incur debts on its own name.
  5. Easy Formation:The process of Nidhi company formation is very simple and easy. There are very few requirements compared to other NBFCs.
  6. Ease of Management:Even though Nidhi Company is an NBFC, it is very easy to manage and make changes in the organization

What activities are prohibited for the Nidhi Company?

As Nidhi companies are involved in a non-banking financial transaction, they are prohibited from performing the following activities:

  1. Advertise themselves for deposits
  2. Chit funds
  3. Lotteries
  4. Insurance
  5. Leasing Finance
  6. Hire-Purchase finances
  7. Sell the assets of its members and keep it as a security for providing loans
  8. Entering into a partnership firm for carrying out lending and borrowing activities
  9. Accepting deposits or lending funds to the outsiders
Advantages of Private Limited Company Registration

Nidhi Company registration Process

Procedure of Private Limited Company Registration
  • Step 1. Application for Digital Signature Certificate (DSC)
  • Nidhi company registration is a complete digital process and therefore requirement of Digital Signature Certificate is a mandatory criteria. Directors as well as subscribers to the memorandum of the company need to apply for a DSC from the certified agencies. Obtaining a DSC is a complete online process and it can be done within 24 hours. This process involves 3 simple verifications that are document verification, video verification and phone verification.
  • Step 2. Application for the Name Availability
  • Name application for Nidhi Company can be done through SPICe RUN form which is a part of SPICe+ form. While making the name application of the company, industrial activity code as well as object clause of the company has to be defined.
    Note: It should be ensured that business name does not resemble the name of any other already registered company and also does not violate the provisions of emblems and names (Prevention of Improper Use Act, 1950). You can easily check the name availability by using our company name search tool to verify the same.
  • Step 3. Filing of SPICe Form (INC-32)
  • Post name approval, details with respect to registration of the company has to be drafted in the SPICe+ form. It is a simplified proforma for incorporating a company electronically. The details in the form are as follows:
    1. Structure of the company
    2. Industrial Activity Code and main division
    3. Details of members and subscribers
    4. Address of the company
    5. Particulars for the payment of stamp duty
    6. Attachments for the details mentioned above
    7. Share capital of the company
    8. Application for DIN
    9. Application for PAN and TAN
    10. Declaration by directors and subscribers
    11. Declaration & Certification by professional
  • Step 4. Filing of e-MoA (INC-33) and e-AoA (INC-34)
  • SPICe e-MoA and e-AoA are the linked forms which have to be drafted at the time of application for company registration.

    Memorandum of Association (MOA) is defined under section 2(56) of the Companies Act 2013. It is the foundation on which the company is built. It defines the constitution, powers and objects of the company.

    The Articles of Association (AOA) is defined under section 2(5) of the Companies Act. It details all the rules and regulations relating to the management of the company.

  • Step 5: Issuance of PAN, TAN & Certificate of Incorporation
  • Post approval of the above mentioned documents from the Ministry of Corporate Affairs; PAN, TAN & Certificate of Incorporation will be issued from the concerned department. Now, the company is required to open a current bank account by using these documents. You can contact us for assistance with your current bank account opening.

Register your Nidhi Company Online with Professional Utilities

The process of registering a Nidhi Company is complicated and involves various compliances. Our experts at Professional Utilities can simplify the whole registration process for you. Register your Nidhi company online in 3 easy steps:

Fill our simple form

Fill our simple form and receive a callback from our team of experts

Provide all the required documents

Provide all the required documents for registration of the company and make 50% payment in advance.

Your incorporation certificate

Your incorporation certificate including other documents will be delivered to you and you’ll have to make the balance payment.

Minimum requirements for Nidhi Company registration

  1. Minimum of seven members are required
  2. At least three members must be the directors of the company
  3. Minimum of 5 lakh rupees is required for share capital
  4. Issuing preference shares not allowed
  5. The objective of the company should be receiving deposits and lending to its members only.

Documents required for Nidhi Company registration

  1. Passport size photographs of members
  2. Copy of PAN Card of the members
  3. Copy of Aadhar Card or Voter ID
  4. Bank statement (not older than two months)
  5. Proof of registered place of business
  6. No Objection Certificate from the owner of the property

Documents you’ll get post incorporation

What are the documents you’ll get after registration

Post incorporation of Nidhi company, you’ll receive the following documents:

  1. Certificate of Incorporation
  2. Permanent Account Number (PAN) of the company
  3. Tax Deduction or Collection Account Number (TAN) of the company
  4. Articles of Association (AoA)
  5. Memorandum of Association (MoA)
  6. Direction Identification Number (DIN)
  7. Digital Signature Certificate (DSC)
  8. EPF and ESIC registration documents
  9. Company Master data

Nidhi Company registration fees

The total cost of registering a Nidhi Company including government and professional fees would be around Rs. 10,999.

Total time required for Nidhi Company registration

The total time for registering a Nidhi Company takes around 7-14 working days.

Why Professional Utilities?

Complete Digital Process

Complete Digital Process

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Frequently Asked Questions (FAQs)

 How can I open a Nidhi company?

One can start a Nidhi company in India by providing necessary documents and fulfilling the requirements of a Public Limited Company registration as per the Companies Act, 2013.

 Who regulates Nidhi company?

The Ministry of Corporate Affairs regulates a Nidhi company.

 How can I start a Nidhi Company in India?

One can start a Nidhi company in India by providing necessary documents and fulfilling the requirements of a Public Limited Company registration as per the Companies Act, 2013.

 Is Nidhi company a NBFC?

Yes, Nidhi Company is a type of Non-Banking Financial Company (NBFC). It is also known as Mutual Benefit Finance Company.

 Is Nidhi company profitable?

Yes, a Nidhi company can be profitable but the sole purpose is to borrow and lend money to its members only.

 Can a Nidhi company give a vehicle loan?

No, it cannot give a vehicle loan as it is restricted for Nidhi companies to lend any type of loan.

 Can a Nidhi company take a loan from a bank?

Yes, a Nidhi company can take a loan from the bank.

 Can a Nidhi company give unsecured loans?

No, it cannot give unsecured loans. Nidhi company is strictly forbidden from giving any loans but it can give secured loans to a certain amount only.