A Nidhi company, is one that belongs to the non-banking Indian finance sector and is recognized under section 406 of the Companies Act, 2013. Their core business is borrowing and lending money between their members. Nidhi Companies cannot deal with anybody other than its members.
Nidhi Company registration is simple and less complexed as compared to other types of finance companies like NBFC which require RBI license to start. A Nidhi Company can be started with an initial capital of Rs.5 lakh and require at least seven people to start with. Nidhi Company registration also require three directors initially. Every promoter or director shall need a copy of PAN card, ID proof and address proof to apply for Nidhi Company in India. It takes around 15 to 20 days to get Nidhi Company registered in India.
Due to Digitalization of registration process, it’s become easy to register the private limited company
Obtaining DSC & DIN
Due to online process at least one director need to have digital signature (Dsc) which is required to sign electronic document.
For obtaining DSC, self-attested copy of director's pan card & his address proof is required.
Obtaining DSC & DIN
Firstly You need to find your name has not been taken
Secondly, you need to comply with the MCA guidelines. You can do so by ensuring that the name has a unique component and a descriptive component.
Company Registration Form & MoA & AoA Submission
Copy of Rental Agreement (along with NOC from owner)/Sale Deed in case of own property
Telephone or Mobile Bill/Electricity or Gas Bill Scanned copy of Notarized Rental Agreement in English
Affidavit from director and shareholders
Copy of PAN card, Identity and Address Proof for DIN for up to 3 directors
Company Incorporation Certificate
Once all the documents are approved by MCA , it will issue a incorpation certificate.
Apply for PAN & TAN & Bank Account
On the basis of incorporation certificate u can apply for the TAN , PAN & Bank.
Nidhi Company is registered as a limited company, under the Companies Act, 2013, with the sole purpose of cultivating the habit of savings amongst its members. The Nidhi companies are allowed to accept deposit from its members and out of that give loan only to their members. Therefore, the funds accumulated by a Nidhi company are only from its members use.
A Nidhi company can advance the following types of loan to its members only
•Loan against FDR and Deposits
•Loan Against NSC/Government Bonds
•Micro Finance lending with a cap of 20% Interest
All Unsecured loan is prohibited by Nidhi Company, for example Vehicle Finance,Chit Fund, Hire-Purchase Finance, Leasing Finance, Insurance or Securities Business.
A Nidhi Company can accept only following kinds of deposits strictly from amongst their members without publication of any advertisement seeking such deposits.
•Fixed deposit (FD)
•Recurring deposit (RD)
Nidhi can accept deposits up to 20 times the funds invested. For example, if the Investment is Rs. 5 lakh then deposit up to Rs. 1 Crore can be accepted.
A Nidhi Company is a class of NBFCs and though the RBI is legally empowered to issue directions in matters relating to the deposit acceptance activities of a Nidhi Company. However, recognising the fact that the Nidhi Companies deal with their shareholder-members only, RBI has exempted the notified Nidhis from the core banking provisions of the RBI Act and other directions as are applicable to the NBFCs. Therefore, Nidhi Company is an ideal form of business to take the deposit from and lend to a specific group of people.
The word "Nidhi" is a Hindi Word which means "Fund", with respect to a Nidhi Company we can say that it is like a self-help group in a more formal way, with advantages as of NBFC with restriction of dealing only amongst the members of the company. To start a Nidhi Company minimum of seven shareholders and three directors are required. The MOA must contain the sole purpose to operate as a Nidhi Company. All procedural requirements of incorporation of a public limited company are applicable for Nidhi Company as it is primarily a Public Limited Company. Contact us for a detailed one on one consultation for a thorough understanding of the procedural aspect of starting a Nidhi Business in Company form.
Yes, In view of the rules framed by the Government of India/Ministry of Corporate Affairs and RBI which applies strictly on Nidhi Companies, we can say that the deposits are fairly safe with the Nidhi Company.