Nidhi Company Registration

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Nidhi Companies in India are created for cultivating the habit of thrift and savings amongst its members. Nidhi companies are allowed to borrow from their members and lend to their members. Therefore, the funds contributed to a Nidhi company are only from its members (shareholders). 

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Introduction

Nidhi Company Registration

Nowadays, Nidhi Company has evolved as a popular lending mechanism for obtaining secured loans. It’s a type of lending company and it is formed to borrow and lend money to its members. These companies are most predominant in the Southern Parts of India. Further, Section 406 of the Companies Act, 2013, deals with the process of Nidhi Company Registration. No license is required from the RBI (Reserve Bank of India) to register a Nidhi Company in India. Therefore, forming a Nidhi Company is easy and Nidhi Companies in India are registered as Public Companies and must have Nidhi Limited at the end of their name.

The key decisions to be taken before starting a NIDHI Company?

  • What would be the name of the Company?
  • What amount of capital would be invented in the company?
  • How many members would the company have?
  • Who would be the first directors of the company?

Benefits

Benefits Of Nidhi Company Registration

Process

Nidhi Company Registration In Easy Steps

Nidhi Company Registration name structure

Unique Name

Helps in easy approval of name, and to create distinct identity

Business Object

Clearly communicate your business activity

Constitution Type

Distinct name that isn't an formerly registered company or trademark stands a better chance of name blessing from MCA.

Document Checklist

Documents Required for Nidhi Company Registration in India

Faq

Frequently Asked Questions (FAQ)

An average period of 15 business working days is required for setting up of a Nidhi Company.

The primary documents required for Nidhi Company Registration are ID proofs, Address proofs, latest bank statements, and Address proof of the Registered Office.

 

No, a NIDHI Company cannot issue preference shares according to NIDHI Rules, 2014. If a NIDHI Company has issued preference shares before the introduction of the NIDHI Rules, 2014 or the Companies Act, 2013, such shares shall be redeemed in accordance with the terms of issue of such shares.
A NIDHI Company may open branch offices, only if it has earned net profits after tax, continuously during the preceding financial years. A NIDHI Company can open a maximum of three branches within the district it is located in. If it proposes to open more than three branches within the district, or a branch outside the district, it must seek a prior approval from the regional director who has jurisdiction over the company. Note that no NIDHI Company can open branches outside the state where its registered address is located.
 
Yes, a director can be a member of a NIDHI company unconditionally.

A DIN or Director Identification Number is a unique identification number given to every director by the Ministry of Corporate Affairs. It has lifetime validity, and a director can never be allotted with two DINs.

 

A Certificate of Incorporation has lifetime validity, or till the time the company’s name is not struck off by the ROC (Registrar of Companies).

No, a NIDHI Company cannot acquire another company by purchase of securities, unless a special resolution to the effect has been passed in the General Meeting of its shareholders of the NIDHI company, and a prior approval regarding the same has been granted by the Regional Director which has jurisdiction over the NIDHI Company.
 

A Nidhi Company is not regulated and governed by the provisions of RBI. Moreover, Nidhi Company Registration requires a much smaller amount of capital than Rs 2 Crore paid-up capital requirement for NBFCs.

 

No, a Nidhi Company is not allowed to open a Current Bank Account with its shareholders or members.

 

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