What is Nidhi Company Registration: Process, Fees, Documents

-

Nidhi company registration
If you are preparing to open a financial business without investing a huge capital amount, you must start a Nidhi Company. Ministry of Corporate Affairs regulates Nidhi Company. Nidhi Company registration is done per the guidelines of the provision of Nidhi rules,2014.

What is Nidhi Company Registration?

Nidhi company works as a blessing for the business establishments or an individual who wants to start a loan/financial business in India. It helps in the affordability of such a business.
By the Nidhi company the registration process, the incorporations of Non-Banking Financial Institutions(NBFC) can come under the Nidhi company. Another name used for NBFCs is the Mutual Benefits Finance Company; all the provision of this registration occurs according to the provisions of Companies Act, 2013.
The main function of the Nidhi Company is accepting deposits and lending money. Nidhi company registration process is easy as compared to other non-Banking Financial Institutions, and on the other hand, it enjoys certain benefits of tax exemption and annual compliances. Nidhi company promotes the feeling of smart spending and savings in the minds of its members.
Nidhi Companies are widely known as the Nidhi Banks' attempts to generate valued trust among the members of the company. According to the Nidhi Company rules, it can perform transactions in the limited boundaries mentioned under Nidhi company rules and can only transact with its members. It is right to say that these companies acquire from their members and distribute them among them. All the activities of a Nidhi company are regulated by the Reserve Bank of India. The eligibility of norms is of least qualification for the directors in this type of Non-Banking Financial Companies.
It is mandatory for all the Nidhi companies to have Nidhi Ltd. registered in their company name. 

Some Key Points of Nidhi Company Registration


  •      Under Section 406 of the Companies Act, 2013, and in the Nidhi Companies Rules of 2014, all the provisions related to the authority and establishment of a Nidhi company in the territory of India are specified.
  •      The Reserve Bank of India grants various exemptions to Nidhi Companies as they trade in lending money and accepting deposits from its members only.
  •      Regulations and guidelines for Nidhi Companies are regulated by the Reserve Bank of India, most of the guidelines are for the investment and what financial activities should be conducted by the companies.
  •      In comparison with the systematic sector of banking, Nidhi companies earn low rates of interest.
  •     Nidhi companies work with their members to mutually benefit each other in the process. They are also known as Mutual Benefit Societies. In the lending and borrowing activities, all the members of the company have to participate.

Advantages of a Nidhi Company




Process for Nidhi Company Registration

Nidhi Company Registration process is considered easy, but help from a professional is still recommended. It becomes easy to file a complex set of forms with the help of a professional. Nidhi Company Registration process required documents like;

  •      Directors and Members - Begin with KYC Part
KYC process is mandatory for all the directors and members of the company.  The minimum number of directors required for Nidhi Company is three and a minimum of seven members. A member can also be the director of the company.

  •      Digital Signature
It is mandatory for the Nidhi Company Registration process to acquire a digital signature and all the Forms and documents submitted to be self-attested.

  •      Name of the Company
The directors have to provide suggestions of at least three names to proceed with the Nidhi company registration process. MCA will permit to use only one name. The suggestions should be unique as they should not have any resemblance to already registered companies.  SPICE + web-based form helps in preserving the name.

  •       Final corporation of MOA and AOA
After the name selection process is completed, the Nidhi Company Registration application is submitted along with all Memorandum of Association and Articles of Association of the Nidhi company. A cross verification is conducted by authorities in a prescribed manner, and then the COI is issued.

  •      Opening of Bank Account & PAN and TAN
The company will receive its PAN card and TAN number within a week of the process completion. Then the PAN and TAN and Memorandum of Association and Article of Association should be submitted to the to open a bank account.

Required documents for Nidhi Company Registration Process

Mandatory documents required to complete the Nidhi Company Registration process are:
·         A PAN card copy of all the directors of the company
·         Every member or shareholder and director have to provide an identification proof
·         Passport size photographs of all the directors and members or shareholders of the company
·         Utility bills like electricity bill etc. for address proof
·         Aadhaar card of all the members or shareholders and directors of the company  
·         Directors and members have to provide their address proof
·          In case if the business premise is rented or on than the rent or lease agreement
·         Copy of the property papers

Compulsory Compliances for Nidhi Company


Provisions after Nidhi Company Registration


  •      To comply with the provisions, Nidhi Company should have at least 200 members at the year-end.
  •       Now owned by the must be at least ten lakh or more than ten lakh rupees.
  •      The net owned fund ratio should not exceed 1:20.
  •      No minor, trust or a corporate body can be added as a member by Nidhi company.
  •    Unencumbered term deposit should be more than 10% of outstanding deposits as prescribed.

Fees for Nidhi Company Registration Process


  •      Registration Fee Payable to Ministry of Corporate Affairs
This fee is decided based on the authorized capital of the company. Higher the authorized capital of the company higher the registration fee is charged, other than that a Rs 1000 is payable for name approval and another Rs 500 for DIN registration per director.

  •      Stamp Duty
Stamp duty is paid on Articles of Association and Memorandum of Associations. The amount of stamp duty varies from state to state so it is not fixed.

Conclusion

Nidhi Company is a form of Non-Banking Financial companies which do not need a high amount of capital to invest in loan/financial business. It is an easy process and very helpful for the middle class people as serves the need properly with low interest rates. RBI regulates the Nidhi company registration process. It is regulated by Companies Act , 2013 to protect the rights of general public. 


Location: India

Comments

Post a Comment

Popular posts from this blog

How to obtain Sole Proprietorship Registration in India?

-
Image
Sole Proprietorship Registration is a straightforward process as it does not involve any formal or government procedures. It is one of the most opted forms of business establishments in India. Furthermore, when a single person opens a proprietor firm, then it is called a Sole Proprietorship. Moreover, you can validate your Sole Proprietorship firm by taking government licenses based on the type of business you are running. What to know more about Sole Proprietorship Registration ? Keep reading this blog to know more about Sole Proprietorship firm and how to register one for you. About Sole proprietorship firms When a person solely runs a proprietor firm, then that type of firm is called a sole proprietorship firm. Also, this type of business has the minimum compliance and another requirement along with least registration fees. However, there is no formal way of registering a Sole Proprietorship firm. Thus, you can obtain other government licenses and authorizations to prov...
Read more

How to apply for FIEO Registration?

-
Image
With a perspective to provide a genuine identity to the exporters in our country, the Government of India has established an organisation called FIEO abbreviated as Federation of Indian Export Organization. It is the organisation which represents the interest of the government recognised exporting firms such as Export House, Star Export House, Trading House etc. The organisation is not only involved in promoting the export of merchandise, but it also promotes the export of services. FIEO Registration is the mandatory requirement for every exporter in our country through which they can start and continue their international trading. Here we will have a look at the entire procedure for the FIEO Registration. What is FIEO? Federation of Indian Export Organization popularly known as FIEO was established in the year 1965 by the joint collaboration of Ministry of trade and commerce and Private Trade and Industry. It is the apex body of the commodity boards, export promotion counc...
Read more

What is the process for LLP Registration ?

-
Image
LLP is a kind of business form which combines the flexibility of partners and the benefits of limited liability at a very nominal cost of compliance. LLP offers the benefit of limited liability to its owners and minimal maintenance. The owner of a private limited company has limited liability to its creditors. In the case of nonpayment, banks/creditors can only sell the company’s assets and not the personal assets of owners. LLP is a hybrid of a company, as well as a partnership firm. This the article includes the process related to LLP Registration in India . What are the features of LLP Registration? The features of LLP registration are- What are the documents necessary for LLP Registration? The documents required by Partners are- The documents required for LLP What is the need of LLP registration? The concept of a Limited Liability Partnership is useful for small and medium-sized enterprises. Limited Liability Partnership is responsible...
Read more