Nidhi Company

A Nidhi Company is a type of non-banking financial institution (NBFC) unique to India. It is created primarily for cultivating the habit of thrift and savings amongst its members. Nidhi companies are categorized under Section 406 of the Companies Act, 2013, and are governed by the Ministry of Corporate Affairs (MCA).

Nidhi Companies are formed to borrow and lend money to its members. It is dependent on the principle of mutual benefit and building the habit of saving among its members. These companies are more operative in the southern part of India. A Nidhi company can be started with a Minimum capital of Rs.10 lakh and requires at least seven people to start with (minimum 7 members).

• Purpose: To encourage savings and provide loans to its members.
   
• Members: Minimum of 7 members.
   
• Directors: Minimum of 3 directors needed.
   
• Net Owned Funds: Minimum net owned funds of ₹10 lakh.
   
• Deposits: Must not accept deposits from non-members.
   
• Business: Cannot undertake activities outside its core objective of lending and accepting deposits from members.

• Encourages Savings: Promotes the habit of saving among its members.
   
• Mutual Benefit: Operates on the principle of mutual benefit, ensuring fair treatment of all members.
   
• Member-Focused: Loans are provided to members at lower interest rates compared to other financial institutions.
   
• Simplified Management: Governed by fewer regulations compared to other NBFCs, making management simpler.
   
• Security: Ensures the security of funds as only members can borrow or lend.

Name Reservation: Apply for name reservation through the Ministry of Corporate Affairs (MCA) using the RUN (Reserve Unique Name) form. Ensure the proposed name includes the word "Nidhi Limited."
 

Digital Signature Certificate (DSC): Obtain Digital Signature Certificates for all the proposed directors of the company.
 

Director Identification Number (DIN): Apply for Director Identification Numbers for the proposed directors if they don't already have DINs.
 

Preparation of Documents:

• Draft the Memorandum of Association (MOA) and Articles of Association (AOA) of the company.
• Prepare other necessary documents such as the declaration by the first directors (DIR-2), an affidavit from the subscribers, and address proof.
   

Filing of Incorporation Forms:

• File the incorporation form SPICe (Simplified Proforma for Incorporating Company Electronically) along with MOA, AOA, and other required documents with the Registrar of Companies (ROC).
   

Payment of Fees:

• Pay the requisite registration fees and stamp duty.
   

Certificate of Incorporation:

• Upon approval, the ROC issues a Certificate of Incorporation, and the Nidhi Company is officially registered.

Identity Proof: PAN card and Aadhaar card of all directors and shareholders.
 

Address Proof:

• Voter ID, passport, or driving license of all directors and shareholders.
• Recent utility bill (electricity, water, telephone) for the registered office address.
   

Photographs: Passport-sized photographs of all directors and shareholders.
 

Ownership Proof: Ownership documents or rental agreement of the registered office.
 

No Objection Certificate (NOC): NOC from the owner of the registered office premises.

By partnering with SS Auditors, you can ensure a smooth and hassle-free registration process for your Nidhi company, allowing you to focus on building and expanding your business. Their professional assistance ensures compliance with all legal requirements, providing you with peace of mind and a solid foundation for your company’s growth.