Updated on September 12, 2023 11:23:38 AM
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. It is a type of public limited company and is governed by the Companies Act, 2013. Get to know the benefits, process, requirements and fees of Nidhi company registration.
Nidhi Company - Incorporation Certificate [Sample]
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 limited company and must include “Nidhi Limited” as the last words of its name.
The sole objective of Nidhi company is to promote the culture of savings among its members.
Nidhi company falls under NBFC category, but it does not require approval of Reserve Bank of India.
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.
Nidhi Company is a separate legal entity which means it can acquire assets and incur debts on its own name.
The process of Nidhi company formation is very simple and easy. There are very few requirements compared to other NBFCs.
Even though Nidhi Company is an NBFC, it is very easy to manage and make changes in the organization.
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.
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.
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:
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.
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.
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:
Step 1:
Get in touch via call or contact form
Step 2:
Provide necessary documents
Step 3:
Get your incorporation registered in 14-21 working days
Post incorporation of Nidhi company, you’ll receive the following documents:
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The total cost of Nidhi Company registration in India, including government and professional fees, starts from ₹11,599 and takes around 14-21 working days.
| Steps | Cost (Rs.) |
|---|---|
| Digital Signature Certificate | ₹1,000 |
| Government Fee | ₹7,600 |
| Professional Fee | ₹2,999 |
| Total Cost | ₹11,599* |
Important Note: The total incorporation fees of a Nidhi Company varies from state to state. Refer to the map for state-wise prices.
On average, it takes around 14-21 working days to register a Nidhi company in India subject to document verification by the Ministry of Corporate Affairs (MCA).
As Nidhi companies are involved in a non-banking financial transaction, they are prohibited from performing the following activities:
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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.
The Ministry of Corporate Affairs regulates 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.
Yes, Nidhi Company is a type of Non-Banking Financial Company (NBFC). It is also known as Mutual Benefit Finance Company.
Yes, a Nidhi company can be profitable but the sole purpose is to borrow and lend money to its members only.
No, it cannot give a vehicle loan as it is restricted for Nidhi companies to lend any type of loan.
Yes, a Nidhi company can take a loan from the bank.
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.
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