0

How to Register Nidhi Company in India

Nidhi Company is the most popular form for giving loans to its members and accepting deposits from its members. It is also called a mutual benefit Company. For Providing Loan and Accepting Deposits you have to register Nidhi Company and with the Capital of Nidhi Company subject to the Condition provided in Nidhi Rules you can lend money and accept deposits from Its members. The First step to start a Nidhi Company is to complete the Nidhi Company Registration as per provisions of the Companies Act, 2013 and Nidhi Rules 2014.

Nidhi Company will always be a public limited company and its name should end with ‘Nidhi Limited”, Presently Nidhi Company is becoming very popular for lending business.

nidhi company

Step By Step Nidhi Company Registration Procedure:

  • Obtaining Digital Signature Certificate (DSC ) for All the members/Shareholders and Directors
  • Preparation of requried Declarations and Documents for Nidhi Company Registraiton
  • Application for Approval of name
  • Preparation and Drafting of Incorporation documents
  • Signing of Incorporation Documents
  • Application for Incorporation of Nidhi Company with ROC
  • Approval by ROC, after verifying all  the required documents and information.

Minimum Requirements For Nidhi Company Registration

1. Required Minimum 3 Directors and 7 Shareholders/members
2. Can Accept Deposits From its members
3. Body Corporate and Benefits of Limited Liability
4. Can Land Money to its Members
5. Can Provide Locker Facility to its members
6. Required to have a Minimum of 200 members within one year of Incorporation
7. Best suited for Small lending and deposit Business
8. Minimum Capital Rs. 5 Lakh at the time of Incorporation and Thereafter required to have Rs. 10 Lakh.

Documents Required For Nidhi Company Registration

1. PAN of all Directors
2. Voter ID/DL/Aadhar Card/Passport of All Directors /members
3. Passport Photo of all Directors
4. Latest Bank Passbook/Statement or Electricity/Broadband Bill/Mobile Bill
5. Latest utility bill (electric bill/telephone bill) and Rent Agreement or latest tax receipt/ownership deep of the property for the property to be used for registered office

Net Owned Funds Requirements

Every Nidhi Company is required to have Minimum Net Owned Funds of Rs. 10Lakh all the time. Within one year from Registration of Company Should follow this requirement.

Net Owned Funds

Aggregate Amount of paid-up equity share capital and free reserves as reduced by accumulated losses and intangible assets appearing in the last audited balance sheet provided the amount representing the proceeds of the issue of preference share shall not be included for calculating net owned funds.

What Nidhi Company Cannot Do As Par Nidhi Rules

If you planning to Register this company , you must need to ensure that what you cannot do in Nidhi Company, Once Nidhi Company Registration is done, you must follow Nidhi Rules

  • Shall not carry any chit fund, hire purchase finance leasing finance insurance or acquisition of securities issued by any Body corporate
  • Not allowed to issue any kind of preference shares or any debt instruments by any name whatsoever.
  • Prohibited to open any current account with its members
  • Prohibited to do any compromise or arrangement or takeover unless it is passed by a Special Resolution in the General Meeting and also obtained the previous approval from the Regional Director having jurisdiction over such nidhi company
  • Carry on any business other than the business of borrowing or lending in its own name
  • Prohibited to accept deposits or lend amount other than its members
  • Pledge any of the assets lodged by its members as security
  • Prohibited to take deposits or lend money to any Body corporate
  • These companies are prohibited to enter into any partnership arrangement in its borrowing or lending activities
  • Prohibited to issue any advertisement in any form for soliciting deposits

How much loan a Nidhi Company can provide to its Member

  • Rs. 2 Lakh where a total amount of Deposits form its members is less than Rs. 2 crore
  • Rs. 7.50 Lakh where the total amount of Deposits form its members is more than Rs. 2 crore but less than twenty crore rupees
  • Rs. 12 Lakh where the total amount of Deposits form its members is more than Rs. 20 crore but less than Fifty crore rupees
  • Rs. 15 Lakh where the total amount of Deposits form its members is more than Rs. 50 crore
  • No fresh loans exceeding 15% of above can be if Nidhi is not profitable for continuously three preceding financial years.
  • Members who have taken a loan from Nidhi and defaulted in repayment of such loan shall not be allowed to take fresh loans form Nidhi.
  • Only Members of Nidhi Company can take loan form Nidhi Company

How Much Interest Can Be Charged On Loans By Nidhi Company

The rate of Interest to be charged on loan given by Nidhi shall not go above seven and a half percent(7.5%) above the highest rate of interest offered on deposits by Nidhi.

i.e.7.5% the gross margin that a Nidhi Company is able to earn from the operations.

 

Fastlegal Team

Fastlegal.in is an online provider of legal services such as IP registration & filing, company registration, taxation returns, legal compliance & annual filings, contract drafting, Online Annual Compliance package on a subscription basis (ROC filing, audit requirements, change in partners etc) and Online Registration Package (registering business as a private limited company or LLP or Partnership).

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.