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Nidhi Company Registration

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Who Should Register For A Nidhi Company?

Step-1

The directors must be registered with the MCA

Step-2

Deciding on a company name and registering it

Step-3

Principle approval from RBI

What is a Nidhi Company?

It is a company classified as an NBFC (a Non-banking financing company) and registered under Section 406 of Companies Act, 2013. The main business of such a company is to facilitate lending money between the core members of the company. This way members (or shareholders) are encouraged to save money and invest them within the company. These deposits are then used by the company for its members (or shareholders), to provide loans or advances, and to acquire government-issued stocks/bonds/debentures/securities. It is regulated by the Ministry of Corporate Affairs, while the RBI monitors all its financial dealings.

Benefits of a Nidhi Company

  • Cheaper To Borrow: As a member, one can borrow money at a minimum rate, relative to the rate at which banks lend money. This can be a major advantage in times of need, as different individuals in the mutual benefit society are likely to need funds at different points in time.
  • Encourages Savings:It encourages all its members to save money and encourages a thrifty lifestyle. A Nidhi Company, after all, is a mutual benefit society wherein members can lend or borrow money and accept financial aid amongst them.

What are the 10 things Nidhi Companies cannot do as an NBFC (Non-Banking Financial Company)?

A Nidhi company cannot deal in the following –

  • Chit fund business
  • Hire purchase finance
  • Acquisition/insurance of securities issued by any corporate
  • Engaging as an NBFC in the business of advances or loans
  • Leasing finance
  • Acquisition of stocks/shares /bonds/securities/debentures issued by any local authority /Govt./marketable securities

Procedure for Nidhi Company Registration

In India, private limited company registration cannot be done without proper identity and address proof.

  • Name Reservation – We help you reserve your name with MCA.
  • DSC and DINs – We help you get 1 DSC and 3 DINs.
  • Documents and approval – We help you at every stage of the documentation process and in getting in-principle approval from the RBI.

Documents Required for Nidhi Company Registration

To Be Submitted By All Directors

  • Self-attested copy of PAN Card
  • Self-attested copy of Driver’s License/ Voter ID/ Aadhaar Card/Passport
  • Self-attested copy of Bank Statement/ Telephone Bill/Mobile Bill/ Electricity Bill
  • Passport-size Photograph
  • Specimen Signature Certificate

FAQs on Nidhi Company Registration

A minimum of three branches can be opened in a particular district. In case you want to expand outside the district or want to open more than three branches, the Registrar of Companies need to intimated 30 days prior to their opening.
The conditions laid down by the Act says that a Nidhi Company should acquire a minimum of 200 members within its first year of incorporation. However, in case the company is not able to meet the required numbers, it can apply for an extension with the necessary government authorities.
No, members are only allowed to deposit, borrow, or lend funds.
Any person can deposit, lend or borrow money through the provisions provided by the Companies Act, 2013. Hence, they can all become members of a Nidhi Company. provided they are not a corporation or a company.

Company formation and registration has been made easier with Digitronic. You can easily consult a company secretary through us for all of your compliance needs, including foreign income, FDI, PF, and pensions.

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