Nidhi Company Registration

Definition

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. They are also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. They are regulated by Ministry of Corporate Affairs. Reserve Bank of India is empowered to issue directions to them in matters relating to their deposit acceptance activities. However, in recognition of the fact that these companies deal with their shareholder-members only.

Nidhi companies existed even prior to the existence of companies Act 1913. The basic concept of nidhi is “Principle of Mutuality” (“Paraspara Sahayata”). Thus they function for the common benefit advantage of all their members/share holders.

cost breakup

7DSC (Class II DSC @ 1000 each) 7000
3DIN No. (for 3 Director) 3000
Government Fees 22900
PAN & TAN 175
Professional Fees 9999
GST 1800
Clear

Notes:

  • Stamp Duty is a subject matter of a State and it varies from State to State
  • Franking/stamping and Notary expenses will be on actual basis and will be borne by you.

LIST OF DOCUMENTS FOR REGISTRATION

ID PROOF
PASSPORT SIZE PHOTO
ADDRESS PROOF
COMPANY ADDRESS PROOF

PROCEDURE OF REGISTRATION

INCLUSIVE IN OUR SERVICE

3 Din
7 DSC (Class-2)
Guidance for Name Search & Approval
PAN & TAN
ROC Registration Fees
Object Customization
Draftng of MOA
Draftng of AOA

FREQUENTLY ASKED QUESTIONS

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. They are also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. They are regulated by Ministry of Corporate Affairs. Reserve Bank of India is empowered to issue directions to them in matters relating to their deposit acceptance activities. However, in recognition of the fact that these companies deal with their shareholder-members only.

Nidhi companies existed even prior to the existence of companies Act 1913. The basic concept of nidhi is “Principle of Mutuality” (“Paraspara Sahayata”). Thus they function for the common benefit advantage of all their members/share holders. These companies are more popular in South India, and 80% of Nidhi companies are located in Tamil Nadu.

  • Suitable for lower or middle-income groups
  • Low mobilization of deposits
  • Timely and secured returns
  • Loan at lower interest rates
  • No external interference

The following conditions must be satisfied within a period of 1 year from the commencement:

  • Minimum net owned fund of Rs. 10 lakhs.
  • Minimum 200 shareholders required.
  • Company cannot accept deposits more than 20 times of net owned fund.
  • Minimum encumbered deposit must be 10% of the outstanding deposits.
  • Prohibited to carry businesses of chit fund, leasing finance, insurance or acquisition of securities issued by any body corporate.
  • Restricted to issue shares, debentures or any other instrument.
  • Cannot accept deposits nor lend money, other than its members.
  • Cannot pay any incentive for mobilizing deposits.

DIN is Director Identification Number given to an existing Director or potential Director of any Company which is incorporated or to be incorporated. It is a Unique Identification Number. DIN is issued by Ministry of Corporate Affairs.

Digital Signature Certificate means singing the valuable documents electronically/digitally by an authorized person. It is used for signing the electronic forms. It cannot be used in physical documents.

No, minor cannot become a Director because for Director DIN is compulsory and to get a DIN an individual should have achieved age of 18 years or above.

Yes, NRI/Foreign National Can become a Director as well as a Shareholder of the Indian Company provided he should be a Competent to Contract and the Company in which NRI/ Foreign Nationals is/are Director(s), should have at least 1 Indian Resident as a Director on its Board of Directors.

Yes, a salaried person can also become a Director of a Company provided employment agreement allow for such provisions. Generally, employers do not have any problem if their employee is Director of any Company.

Authorized Share Capital is basically the maximum permissible amount of share capital that a company can issue to shareholders. A Company can change its authorized share capital whenever it require from time to time depending upon the requirement of the company subject to shareholders/members approval.

Paid-up share Capital also known as the Issued share Capital of the company is an amount of shares issued by a company to its share holders.

The registered office of a Company or legal entity is the principle/main place of business for a company and all official correspondence is sent to this location.

According to Section 2(56) of the Company Act, 2013 “Memorandum” means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act. It is a Charter document of the company which contains basic and fundamental details about the company. Any act done beyond the scope of the MoA is void.

Article of Association are by-laws of the Company. It contained Rules & Regulation followed by the Company. It defines objectives, duties and powers of the Board of Director, Borrowing Capacity, Voting Rights, Procedure for issue and transfer of Shares.

Yes, Authorised Capital & Paid-Up Capital can be increased anytime after incorporation.