Nidhi/ Patpedi

?Introduction:

Looking to start a Nidhi Company? We are here to assist you in obtaining a Nidhi Company startup with ease and efficiency. Our comprehensive services cover all aspects of the Nidhi Company registration process, ensuring a smooth and hassle-free experience.

What is a Nidhi Company?

A Nidhi Company is a type of non-banking financial institution (NBFC) recognized under the Companies Act, 2013. It is primarily formed for the mutual benefit of its members, who contribute to and receive financial assistance from the company. Nidhi Companies primarily operate as a savings and lending institution, focusing on cultivating a culture of thrift and financial stability among its members.

Nidhi Company can be incorporated with a minimum seven members and out of these 7 members, 3 members must be the director of the company.

Meaning of the word ‘Nidhi’ ‘Nidhi’ is defined under rule 3 (da) of the Nidhi Rules, 2014 which means a company incorporated as Nidhi with the object of –

• Cultivating habit of thrift and savings amongst the members and
• Receiving deposits from and lending to the members for their mutual benefit, and also duly complying with the rules formed by the Central Government.

Benefits of Nidhi Company Startup:

Mutual Benefit:

Nidhi Companies are formed for the mutual benefit of their members. This means that members can contribute to and avail financial assistance from the company, promoting a culture of savings and financial support within the community.

Limited Liability:

Members of a Nidhi Company enjoy limited liability protection, meaning their personal assets are separate from the company's liabilities. This provides a sense of security for members and ensures their personal financial well-being is safeguarded.

Trust and Credibility:

Nidhi Companies are highly regulated and supervised by the Ministry of Corporate Affairs. This regulatory oversight enhances trust and credibility among members and the public, establishing the Nidhi Company as a reliable and transparent financial institution.

Easy Accessibility:

Nidhi Companies focus on providing financial services to its members, such as loans and deposits. These services are easily accessible to members, ensuring convenient and efficient financial support when needed.

Self-Help and Community Development:

Nidhi Companies promote a culture of self-help and community development. By fostering a savings habit and providing affordable financial services, they contribute to the economic growth and empowerment of their members and the community at large.

No External Shareholding:

Nidhi Companies are distinct from other types of companies as they do not have external shareholders. The control and ownership of the company rest solely with its members, ensuring that the company's operations are aligned with their best interests.

Documents required for 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)

Forms to be filed

There are two forms which are required to be filed.

1. INC 9
2. DIR 2

Conditions to be fulfilled for getting ‘Nidhi’ status

Within one year of its registration

• Nidhi Company should have minimum 200 members within one year from commencement
• Also, the net owned funds should be 10 lakh rupees or more. Net owned funds = 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 be more than 1:20
• If Nidhi Company satisfies all above conditions, it should file NDH-1 along with prescribed fees within 90 days from the end of the first financial year after incorporation. The form must be duly certified by practicing CA/ CS/ CWA.
• Extension of another financial year can be availed upon submission of NDH-2 to the Regional Director within 30 days from the end of the first financial year.
• If even after the second financial year, it doesn’t fulfill the requirements, it can’t accept deposits till it complies with the provisions, and also penalty will be imposed.

FAQs of Nidhi Company Start up:

What is a Nidhi Company?

A Nidhi Company is a type of non-banking financial institution (NBFC) registered under the Companies Act, 2013 in India. It primarily functions to cultivate the habit of thrift and savings among its members and provides them with financial assistance in the form of loans and deposits.

Who can form a Nidhi Company?

A Nidhi Company can be formed by a group of individuals who wish to contribute to and receive financial assistance from the company. The members must meet the eligibility criteria prescribed by the Ministry of Corporate Affairs.

What are the minimum requirements to start a Nidhi Company?

To start a Nidhi Company, you need a minimum of three directors and seven shareholders (members). The directors must have valid Director Identification Numbers (DINs) and Digital Signature Certificates (DSCs).

What are the documents required for Nidhi Company registration?

The documents required for Nidhi Company registration include identity proof and address proof of directors and shareholders, PAN cards, photographs, proof of registered office address, and the memorandum and articles of association of the company.

Is there any minimum capital requirement for Nidhi Company registration?

Yes, a Nidhi Company is required to have a minimum paid-up equity share capital of Rs. 5 lakhs.

Can a Nidhi Company accept deposits from non-members?

No, a Nidhi Company can only accept deposits from its members. It is not allowed to accept deposits from the public or engage in any other banking activities.

What are the compliance requirements for a Nidhi Company?

A Nidhi Company must comply with various legal and regulatory requirements, including maintaining proper books of accounts, conducting annual general meetings, filing annual returns with the Registrar of Companies (RoC), and adhering to the guidelines issued by the Ministry of Corporate Affairs.

Tags regarding Nidhi Company Start up:

Loans and deposits, Shareholders, Directors, Eligibility criteria, Director Identification Number (DIN), Digital Signature Certificate (DSC), Minimum capital requirement, Paid-up capital, Identity proof, Address proof, Registered office address, Memorandum of Association (MOA), Articles of Association (AOA), Compliance requirements, Books of accounts, Annual general meetings.

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