What is Nidhi Company and how it works?

Nidhi Companies belong to the Non-banking financial companies structure. Registering a Nidhi Company allows a Nidhi to borrow from its members and lend to the members.

Nidhi Companies are registered in India are created to cultivate the habit of thrift and savings among its members. The funds that are contributed to a Nidhi Company are only from its members.

For Incorporating a Nidhi Company, no license is required from the Reserve Bank of India. Hence, the formation of the Nidhi Company is easy. Nidhi Companies are registered as Public Companies and should have Nidhi Limited at the last of the name.

It should also be noted that the Nidhi Companies fall under the purview of the Reserve Bank of India as the functioning of Nidhi Companies is similar to NBFCs.

How to incorporate a Nidhi Company in India?

To incorporate a Nidhi Company in India, at least seven members are mandatory, out of which three should be the designated directors. However, the Nidhi Company should acquire at least 200 members within one year of commencement.

For registering a Nidhi Company, it is necessary to have a minimum equity share capital of Rs. 5 lakh. But it is to be noted that the Net Owned Funds (NOF) must be increased to Rs 10 lakhs within one year of registration. While Registering as a Nidhi Company in India, it is necessary to first incorporate into a Limited Company under the Companies Act, 2013.

While Nidhi Company Registration, it necessary to ensure that the objective mentioned in the Memorandum of Association is to cultivate the habit of thrift and savings among the members, receiving and lending to its members only for its mutual benefit.

Post incorporation as a Limited Company, the Nidhi Company should meet the following capacities:

  • Not have less than two hundred shareholders (members)
  • Have Net owned funds of 10 lakh rupees or more
  • Have encumbered deposits of not less than ten percent of the outstanding deposits.
  • Have a ratio of Net owned funds to deposit of not more than 1:20.

Net owned Funds?

The aggregate of paid-up equity capital and free reserves is reduced by the accumulated losses and intangible assets appearing in the last audited balance sheets.

Suppose at the end of one year from commencing, the Nidhi Company cannot meet the above requirement. In that case, the Company may apply to the Regional Director in Form NDH-2 for an extension of time within thirty days close from the first financial year.

Even after the second Financial year the Nidhi Company is unable to meet the requirements for a Nidhi Company. The Nidhi Company should not accept any further deposits from the commencement of the second financial year until it complies with the Provisions for operating as Nidhi Company

 What are the documents required to register a Nidhi Company?

The following documents are required to incorporate a Nidhi Company.

  1. Directors Identification Number
  2. PAN number of the shareholders as well the Directors
  3. Residential Proof of the shareholders and directors
  4. Photographs
  5. Identification Documents such as the Aadhar card
  6. Rent agreement or lease agreement of the Registered office
  7. If the office is owned, then ownership information or the registered office address must be provided
  8. NOC if required
  9. MOA
  10. AOA
  11. MCA form

BASIC

iNR 37,899/Month

8 Class 2 Digital Signatures

3 Director Identification Numbers

1 RUN Name Approval

Upto 10 Lakhs Authorized Capital

Incorporation Fee

Stamp Duty

Incorporation Certificate

Current Account Opening

PAN & TAN

50+ Document Formats

Incorporation Kit

Hard-copy Share Certificates

GST Registration

LEDGERS Accounting Software

GST eWay Bill Software

STANDARD

iNR 51,899/Month

8 Class 2 Digital Signatures

3 Director Identification Numbers

8 Class 2 Digital Signatures

3 Director Identification Numbers

1 RUN Name Approval

Upto 10 Lakhs Authorized Capital

Incorporation Fee

Stamp Duty

Incorporation Certificate

Current Account Opening

PAN & TAN

50+ Document Formats

Incorporation Kit

Hard-copy Share Certificates

GST Registration

LEDGERS Accounting Software

GST eWay Bill Software

Share Allotment for upto 200

shareholders

PREMIUM

iNR 62,899/Month

8 Class 2 Digital Signatures

3 Director Identification Nmbers

1 RUN Name Approval

Upto 10 Lakhs Authorized Capital

Incorporation Fee

Stamp Duty

Incorporation Certificate

Current Account Opening

PAN & TAN

50+ Document Formats

Incorporation Kit

Hard-copy Share Certificates

GST Registration

LEDGERS Accounting Software

GST eWay Bill Software

Share Allotment for upto 200

shareholders

Trademark Registration

  • Class 2 digital signatures with 2 year validity on secure USB token.
  • Upto 4 name options can be given in 1 RUN name approval request.
  • Authorised capital is the amount of shares a company can issue at anytime and can be increased further in the future. Paid-up capital is the amount invested by shareholder and can be even Rs.2.
  • In case of Rs.10 lakh authorised capital, stamp duty of Rs.5120 (on actuals) will be chargeable extra for the state of Gujarat. Rs.5510 will be the additional stamp duty charges for state of Rajasthan. In case of incorporation in Madhya Pradesh, an additional stamp duty of Rs.7550 will be applicable. In case of incorporation in Punjab, an additional stamp duty of Rs.15025 will be applicable. In case of Kerala, an additional stamp duty of Rs.3025 will be applicable.
  • Premium LEDGERS Accounting Software with GST Portal Integration and eWay Bill Software.
  • Statutory Auditor fee is payable on actuals directly to the Independent Auditor appointed by the Board of Directors. IndiaFilings will only be responsible for accounting, preparation of financial statements and filing of returns on behalf of the Company.