Nidhi Limited

  • Name of the Proposed Company
  • Significance of the Name
  • Objective of the Business
  • DIN of directors (if available)
  • Class II Digital Signatures
  • KYC of promoters
  • Identity Proof of directors
  • Address Proof of Directors
  • Authorised Capital Structure
  • Address of Registered Office alongwith proofs
  • NoC from the owner of the Registered Office of the Company
  • Additional documents required depending upon the case.
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WHAT?

Nidhi Company is a Public Company incorporated under the provisions of the Companies Act, 2013 and governed by the Nidhi Rules, 2014 with the objective of:

  1. Cultivating the habit of thrift and savings amongst its members,
  2. Receiving deposits from, and lending to, its members only for their mutual benefit.

It is classified under the category of NBFCs( Non-Banking Financial Institutions) however, it does not require any license from RBI to do the business.

FEATURES
Key features of a Nidhi Company are:
  1. It is a Public Company having a minimum capital of INR 500,000/;-
  2. Nidhi Companies cannot issue Preference Shares;
  3. Minimum 7 members and 3 directors are required for the incorporation of the same.
  4. Within period of ONE year, a Nidhi Company has to ensure, that it has:
    A

    Not less than 200 members;

    B

    Net Owned Funds of 10 Lacs or more;

    C

    Unencumbered term deposits of not less than 10% of the outstanding deposits;

    D

    Ratio of Net Owned Funds to Deposits of not more than 1:20.

  5. Directors of the company should also be the members of the Company.
Restriction on Nidhi Company:
A Nidhi Company is not allowed to do the following:
  1. Carry on the business of
    A

    Chit Funds,

    B

    Hire Purchase Finance,

    C

    Leasing Finance,

    D

    Insurance,

    D

    Acquisition of securities issued by any other body corporate

  2. Issue preference shares, debentures or any other debt instrument by any name or in any form whatsoever;
  3. Open any current account with its member;
  4. Acquire another company by purchase of securities or control the composition of the Board of Directors of any other company in any manner whatsoever ;
  5. Enter into any arrangement for the change of its management, unless it has passed a special resolution in its general meeting and also obtained the previous approval of the Regional Director having jurisdiction over such Nidhi
  6. Carry on any business other than the business of borrowing or lending in its own name;
  7. Accept deposits from or lend to any person, other than its members;
  8. Pledge any of the assets lodged by its members as security;
  9. Take deposits from or lend money to any other body corporate;
  10. Enter into any partnership arrangement in its borrowing or lending activities;
  11. Issue or cause to be issued any advertisement in any form for soliciting deposit;
  12. Pay any brokerage or incentive for mobilizing deposits from members or for deployment of funds or for granting loans.
HOW?

A Nidhi Company is registered under the provisions of the Companies Act, 2013 through the procedure prescribed under the Act and Rules and Regulations made there under.

  • Step1: Name Approval: - The proposed name of the Company is applied by the promoter by paying requisite fee online through RUN(Reserve Unique Name) Web Service. The applied name will be processed by the Central Registration Centre(CRC) and thereafter approval or rejection will communicated to the applicant.
    To avoid rejection the name should be as per the guidelines provided under Companies (Incorporation) Rules, 2014.
    Once the name is approved the said name will be available for 20 days within which the incorporation process has to be completed.
    The name of the Nidhi company must end with the words "Nidhi Limited".
  • Obtaining Digital Signatures: - Digital Signatures of the all the members and any one Directors (if members and directors are different) needs to be obtained for the incorporation of the Company. For obtaining the Digital Signatures following KYC details are required:
    1. Identity Proof, i.e., PAN Card (Self Attested)
    2. Address Proof, i.e., Aadhar Card (Self Attested)
    3. Photographs
    4. Valid Phone Number
    5. Valid E-mail id
  • Step 3: Documents Preparation: - Once the name gets approved by the department, the documents are prepared as per the guidelines given under the Act / Rules for the incorporation of the Company.
  • Step 4: Incorporation: - Incorporation of the Company is done through e-form namely Simplified Proforma for Incorporating Company electronically (SPICEe). Thus, after preparation of documents Form SPICe - INC-32 will be filed along with eMOA (INC-33) and eAOA (INC-34) with the Central Registration Centre(CRC) of Ministry of Corporate Affairs by paying the requisite Stamp duty charges.
  • Step 5: Certificate of Incorporation: - Once the entire process is completed and the concerned department is satisfied by the all the compliances, The Certificate of Incorporation will be issued along with the allotment of PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) of the Company, after which the proposed company will become a separate legal entity to transact the business in its own name.