Nidhi Company REGISTRATION
Nidhi Company, a type of NBFC, promotes savings among members and operates on mutual benefit principles. Primarily in the south, it doesn't need RBI approval, making formation simple. Registered as a public company, its name must end with 'Nidhi Limited'.
Activities Not Allowed:
- No chit funds, hire-purchase finance, leasing, insurance, or securities.
- Can't accept or lend funds to non-members.
- No advertising for deposits.
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Conditions to be fulfilled for getting ‘Nidhi’ status
Nidhi Company should have a minimum of 200 members within one year from commencement.
The net owned funds should be 10 lakh rupees or more. Net owned funds calculation: Equity share capital + free reserves (-) accumulated losses (-) intangible assets.
Unencumbered term deposits must be 10% or higher of the outstanding deposits.
The ratio of net owned funds to deposits shouldn't exceed 1:20.
If the Nidhi Company meets all the above conditions, it must file NDH-1 along with prescribed fees within 90 days from the end of the first financial year after incorporation. The form should be certified by a practicing CA/CS/CWA.
An extension of another financial year can be sought by submitting NDH-2 to the Regional Director within 30 days from the end of the first financial year.
If the requirements are not met even after the second financial year, the company can't accept deposits until compliance is achieved, and penalties may be imposed.
Necessary Documents for Nidhi Registration :
- Proof of the registered place of business (Ownership documents/ rent or lease agreement)
- No Objection Certificate (signed by the owner/ landlord)
- Identity proofs
- Address proofs of the members
- Photos of the members
- PAN card copies of the members
- Digital Signature (DSC)
- Director Identification Number (DIN) of the directors
- Memorandum of Association of the company (MoA)
- Articles of Association of the company (AoA)
- Only one object will be mentioned in MoA of the company: "cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.."
Forms to be filed:
- INC 9
- DIR 2
Forms to be filed in Nidhi Company registration process.