Nidhi Company is a type of Non-Banking Financial (NBFC) Company governed as per Section 406 of the Companies Act, 2013 and Nidhi Rules, 2014. The purpose of forming this company is to borrow and lend money to its members. This company operates on the principle of mutual benefits and inculcates the habit of savings among its members. Nidhi Companies are registered as Public companies and Nidhi Companies generally operate in the southern part of the country. Nidhi Companies are not required to receive a license from the Reserve Bank of India to carry its operations.
The minimum authorised capital of Nidhi Company is Five Lacs. A minimum of 7 members along with 3 directors are required to form a Nidhi Company. Within the time span of one year from the date of incorporation, Nidhi Company should extend its number of members to 200 and the capital should be increased to at least INR 10 lacs. Nidhi Company can only offer secured Loans to its members.
The merits offered after registering as a Nidhi Company are as follows -
Check the following information to apply for the registration of a Nidhi Company.
- Signed MOA and AOA of Company
- Self Attested PAN Card and Address Proof (Aadhar Card, Voter ID Card, Passport) of Directors and Promoters of Company
- Photographs in Soft Copy
- Latest Bank Statement of Directors and Promoters of Company
- NOC from the owner of property
- Electricity or Water bill not older than 2 months
- Rent Agreement
Application for Digital Signature of the directors.
Filing of Name Reservation form with the ROC.
Filling of incorporation form including Spice MOA and Spice AOA.
After completion of all the above procedures, ROC will issue the Certificate of Incorporation.
After the issuance of incorporation, the company has to apply for PAN, TAN and open a current account in the bank.
Incorporation form for Nidhi Company only provides the placeholder for three Directors, however Directors can easily be added at the later stage of Nidhi Company.
No, approval from RBI is not needed for the formation of the Nidhi Company.
The interest rate is already called by RBI which is 12.5% at present. Below that, the management can decide an interest rate, if desires to.
Yes, a Nidhi Company can have an artificial person as its member.
In such a case, Nidhi Company is required to file a specific form to ROC stating that the company will not be able to reach the 200 members mark. ROC generally provides an extension of the time period, within which it is required to have 200 members.
PAN Card is a mandatory document required to be a part of a Nidhi Company. A person without a PAN card will not be allowed to become a member.
No, the founders are not required to be physically present for the formation of a Nidhi company since it is entirely an online procedure.
The biggest restriction on a Nidhi Company is that it can only deal with its members and is not allowed to deal with people who are not its members.
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