{"id":2402,"date":"2016-04-30T15:27:09","date_gmt":"2016-04-30T09:57:09","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=2402"},"modified":"2021-11-12T13:40:19","modified_gmt":"2021-11-12T08:10:19","slug":"corporate-and-professional-update-april-16-2016","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/corporate-and-professional-update-april-16-2016\/","title":{"rendered":"Complete Guide on Nidhi Company Rules and Regulations"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d2631dcb5f7\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d2631dcb5f7\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-april-16-2016\/#Complete_Guide_on_Nidhi_Company_Rules_and_Regulations\" title=\"Complete Guide on Nidhi Company Rules and Regulations\">Complete Guide on Nidhi Company Rules and Regulations<\/a><ul class='ez-toc-list-level-2'><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-april-16-2016\/#What_is_the_purpose_of_a_Nidhi_Company\" title=\"What is the purpose of a Nidhi Company?\">What is the purpose of a Nidhi Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-april-16-2016\/#Reasons_to_Establish_a_Nidhi_Business_in_India\" title=\"Reasons to Establish a Nidhi Business in India\">Reasons to Establish a Nidhi Business in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-april-16-2016\/#What_is_the_procedure_for_forming_a_Nidhi_Company\" title=\"What is the procedure for forming a Nidhi Company?\">What is the procedure for forming a Nidhi Company?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-april-16-2016\/#Specification_for_registering_a_Nidhi_Company\" title=\"Specification for registering a Nidhi Company\">Specification for registering a Nidhi Company<\/a><ul class='ez-toc-list-level-2'><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-april-16-2016\/#Requirements_after_Post-registration\" title=\"Requirements after Post-registration:\">Requirements after Post-registration:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-april-16-2016\/#Documents_Needed_to_Register_a_Nidhi_Company\" title=\"Documents Needed to Register a Nidhi Company\">Documents Needed to Register a Nidhi Company<\/a><ul class='ez-toc-list-level-2'><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-april-16-2016\/#Rules_and_Regulations_of_the_Nidhi_Company_Annual_Compliances\" title=\"Rules and Regulations of the Nidhi Company (Annual Compliances)\">Rules and Regulations of the Nidhi Company (Annual Compliances)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-april-16-2016\/#What_are_the_consequences_of_Nidhi_Companys_non-compliance\" title=\"What are the consequences of Nidhi Company&#8217;s non-compliance?\">What are the consequences of Nidhi Company&#8217;s non-compliance?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/corporate-and-professional-update-april-16-2016\/#A_summary_of_Nidhi_Companies_deposits\" title=\"A summary of Nidhi Companies&#8217; deposits\">A summary of Nidhi Companies&#8217; deposits<\/a><\/li><\/ul><\/nav><\/div>\n<h2><a style=\"font-size: 16px;\" href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/04\/Complete-Guide-on-Nidhi-Company-Rules-and-Regulations..jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-12608\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2016\/04\/Complete-Guide-on-Nidhi-Company-Rules-and-Regulations..jpg\" alt=\"Complete Guide on Nidhi Company Rules and Regulations\" width=\"880\" height=\"493\" \/><\/a><\/h2>\n<p>&nbsp;<\/p>\n<h1><span class=\"ez-toc-section\" id=\"Complete_Guide_on_Nidhi_Company_Rules_and_Regulations\"><\/span><span style=\"color: #000080;\"><strong>Complete Guide on Nidhi Company Rules and Regulations<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>Nidhi Company is an another Non-Banking Financial Company (<a href=\"https:\/\/www.caindelhiindia.com\/blog\/frequently-asked-questions-on-nidhi-company\/\">NBFC<\/a>) formed under Section 406 of the Companies Act of 2013.<\/p>\n<p>It rules and regulations are governed by the Ministry of Corporate Affairs (MCA). Furthermore, the Reserve Bank of India oversees deposit acceptance and makes new Nidhi modifications.<\/p>\n<p>The primary goal of such businesses is to produce wealth among their members by borrowing and lending. Benefit Funds, Permanent Funds, Mutual Benefit Companies, and Mutual Benefit Funds are commonly connected with Nidhi Companies.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_the_purpose_of_a_Nidhi_Company\"><\/span><span style=\"color: #000080;\"><strong>What is the purpose of a Nidhi Company?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The primary objective of the <a href=\"https:\/\/carajput.com\/blog\/tag\/non-banking-financial-companies-nbfcs\/\">Nidhi Company&#8217;s<\/a> formation is to instil the habit of thrift and saving among its members for their mutual benefit.<\/p>\n<p>It adheres to the motto of &#8220;One for all, All for one,&#8221; in which each member considers the needs of the others and contributes their fair share of funds.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Reasons_to_Establish_a_Nidhi_Business_in_India\"><\/span><span style=\"color: #000080;\"><strong>Reasons to Establish a Nidhi Business in India<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>The term Nidhi, which has its origins in India&#8217;s traditional roots, means &#8220;treasure.&#8221; A Nidhi Firm is a type of non-banking financial company that was established under Section 406 of the Companies Act 2013.<\/li>\n<li>Nidhi Company&#8217;s main goal is to instill in its members the habit of saving and thrift. Nidhi businesses, which borrow and lend money from members to members, are known by a variety of names, including Nidhi, Benefit Funds, Mutual Benefit Funds, Permanent Fund, and Mutual Benefit Company.<\/li>\n<li>They are mutual benefit societies with just individual members and limited dealings. A Nidhi company&#8217;s main source of funds is the contributions of its members.<\/li>\n<li>Members of such localised offices can obtain loans at relatively low interest rates for a variety of objectives, such as housing construction or maintenance. Nidhi Company operates in a constrained environment, limiting its ability to accept deposits.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"What_is_the_procedure_for_forming_a_Nidhi_Company\"><\/span><span style=\"color: #000080;\"><strong>What is the procedure for forming a Nidhi Company?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Nidhi Company&#8217;s incorporation requirements and regulations are highly strict. The \u2018Nidhi Rules, 2014&#8242; were designed by the Central Government to ensure that every Nidhi Company accomplishes its ultimate goal.<\/p>\n<p>As a result, anyone wishing to incorporate as a Nidhi must follow the pre- and post-requirements outlined in the Nidhi Rules-2014.<\/p>\n<h1><span class=\"ez-toc-section\" id=\"Specification_for_registering_a_Nidhi_Company\"><\/span><span style=\"color: #000080;\"><strong>Specification for registering a Nidhi Company<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>Since Nidhi was incorporated as a public company under the Companies Act, 2013, anyone interested in forming a Nidhi company must meet the following act&#8217;s requirements:<\/p>\n<ul>\n<li>A paid-up equity share capital of INR 5 lakhs is required.<\/li>\n<li>To form a Nidhi Company, a minimum of seven members are required, three of whom must be directors of an existing company.<\/li>\n<li>Nidhi Corporations are unable to issue preference shares. If a corporation has previously issued preference shares, those shares must be redeemed according to the terms of the issue.<\/li>\n<li>Every company that wants to create a Nidhi firm must include the words &#8220;Nidhi Limited&#8221; in its name.<\/li>\n<li>The company&#8217;s only purpose will be to encourage members to save money by allowing them to receive and lend money among themselves.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Requirements_after_Post-registration\"><\/span><span style=\"color: #000080;\"><strong>Requirements after Post-registration:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Even after completing the incorporation step, every <a href=\"https:\/\/carajput.com\/blog\/tag\/non-banking-financial-companies-nbfcs\/\">Nidhi Company<\/a> must ensure that it meets the following requirements within one year of its establishment:<\/p>\n<ul>\n<li>A minimum of 200 members: In order to comply with the law, Nidhi firms must have at least 200 members. Furthermore, the organisation must verify that the total number of members does not fall below 200 at any time.<\/li>\n<li>Net Owned Fund: Net Owned Funds of at least Rupees ten lakhs, with unencumbered term deposits of at least 10% of outstanding deposits.<\/li>\n<li>Ratio: The NOF to deposit ratio must not exceed 1:20.<\/li>\n<li>Nidhi businesses are not permitted to admit a body corporate as a member. A minor is also not to be admired as a member.<\/li>\n<\/ul>\n<p><span style=\"color: #993366;\"><em><u>Note: NOF refers to the total sum of paid-up equity share capital and free reserves as shown in the company&#8217;s latest\u00a0 balance sheet<\/u><\/em><\/span><\/p>\n<h1><span class=\"ez-toc-section\" id=\"Documents_Needed_to_Register_a_Nidhi_Company\"><\/span><span style=\"color: #000080;\"><strong>Documents Needed to Register a Nidhi Company<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>Once you&#8217;ve completed all of the prerequisites, you can apply for Nidhi registration, which requires the following documents:<\/p>\n<ul>\n<li><span style=\"color: #000080;\"><strong>An identification evidence for all directors and stockholders: <\/strong><\/span>Before forming a Nidhi Company, you must provide the directors&#8217; and shareholders&#8217; identities. It comprises a copy of the member&#8217;s PAN card if they are Indian nationals, and a copy of their passport if they are a foreign national.<\/li>\n<li><span style=\"color: #000080;\"><strong>Residential proof of directors and shareholders: <\/strong><\/span>you must also produce residential proof of the company&#8217;s members in the form of bank statements or utility bills that are no more than two months old.<\/li>\n<li><strong><span style=\"color: #000080;\">A proof of registered office in India:<\/span> <\/strong>you must include a residential evidence of your registered office with your Nidhi registration application.<\/li>\n<li>Send the office a copy of your property tax receipt, water bill, or power bill. If the office is rented, you must produce a copy of the leasing agreement or an ownership document with the landlord&#8217;s permission.<\/li>\n<li>Include passport-size pictures of all directors and shareholders, as well as all proposed members&#8217; Aadhar cards.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Rules_and_Regulations_of_the_Nidhi_Company_Annual_Compliances\"><\/span><span style=\"color: #000080;\"><strong>Rules and Regulations of the Nidhi Company (Annual Compliances)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"color: #993366;\"><strong><em>Every company incorporated under Section 406 of the Companies Act, 2013, must comply with three crucial requirements:<\/em><\/strong><\/span><\/p>\n<ul>\n<li><span style=\"color: #ff0000;\"><strong>Form\u00a0NDH-1:<\/strong> <\/span>\u00a0The Return of Statutory Compliances is included in Form NDH-1. If your incorporated firm meets all of the requirements of the Nidhi Rules 2014, you must file Form NDH-1 and pay the required costs. Also, make sure to file it within 90 days of the first financial year&#8217;s end. In reality, the form must be duly validated by a Chartered Accountant or a Company Secretary. You can also hire a cost and management accountant to help you with this.<\/li>\n<li><strong><span style=\"color: #ff0000;\">Form\u00a0NDH-2:<\/span>\u00a0<\/strong>It&#8217;s an application for a time extension. Within 30 days following the end of the first financial year, file Form NDH-2 for a time extension. To do so, submit an application to the Regional Director along with the required fee as per the Nidhi Rules, 2014. As a result, the Regional Director will consider the application and issue orders within thirty days of its receipt. <em>This form must be filed only if your firm fails to achieve the following requirements:<\/em><\/li>\n<\/ul>\n<ol>\n<li style=\"list-style-type: none;\">\n<ol>\n<li>Maintaining a minimum of 200 members within one year of establishment; and<\/li>\n<li>Failure to maintain a NOF to deposit ratio of 1:20.<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<ul>\n<li><strong><span style=\"color: #ff0000;\">Form\u00a0NDH-3:<\/span>\u00a0<\/strong>The Half Yearly Return is the name given to this form. Within 30 days at the end of each half-year, file NDH-3 with the Registrar of Companies (ROC) together with the required fees. The form must also be duly certified by a practising\u00a0Chartered Accountant, Company Secretary, or Cost Accountant.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"What_are_the_consequences_of_Nidhi_Companys_non-compliance\"><\/span><span style=\"color: #000080;\"><strong>What are the consequences of Nidhi Company&#8217;s non-compliance?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If the company and each officer in default do not comply with the Nidhi Rules 2014 and the Companies Act, 2013, the company and each officer in default will be found guilty and will be subject to a fine of Rs. 5000\/-.<\/p>\n<p>Furthermore, if the violation persists from the company&#8217;s end, it will be ruled criminal. As a result, the defaulter must pay around Rs. 500\/- per day till the violation is resolved.<\/p>\n<h1><span class=\"ez-toc-section\" id=\"A_summary_of_Nidhi_Companies_deposits\"><\/span><span style=\"color: #000080;\"><strong>A summary of Nidhi Companies&#8217; deposits<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>The following are the rules that every Nidhi corporation should follow when making deposits:<\/p>\n<ul>\n<li>Nidhi Companies may not receive deposits in excess of 20 times their Net Owned Funds; consequently, the NOF to Nidhi Companies ratio should not exceed 1:20.<\/li>\n<li>A Nidhi Company may not accept or lend deposits to anybody other than its members, and<\/li>\n<li>They may not make any type of advertisement soliciting deposits.<\/li>\n<\/ul>\n<p><strong><em>Note: <\/em><\/strong><em>Information on private circulation of fixed deposit schemes among Nidhi members marked &#8220;for private circulation to members only&#8221; is not to be construed as a solicitation of deposits.<\/em><\/p>\n<ul>\n<li>Companies engaged in Nidhi business should not pay any brokerage or for the deployment of money or incentives for mobilising deposits from members.<\/li>\n<li>They shall not pledge any of their members&#8217; assets as security.<\/li>\n<li>Deposits in the name of a minor are permissible if done by the natural or legal guardian, who must be a Nidhi member. A minor, on the other hand, is not eligible to join Nidhi.<\/li>\n<\/ul>\n<table style=\"height: 204px;\" width=\"825\">\n<tbody>\n<tr>\n<td>NBFC Registrtaion<strong>\u00a0<\/strong><\/td>\n<td>FFMC License<\/td>\n<td>MSME Registration<\/td>\n<\/tr>\n<tr>\n<td>NBFC Takeover<\/td>\n<td>Prepaid Wallet License<\/td>\n<td>Nidhi Company Registration<\/td>\n<\/tr>\n<tr>\n<td>NBFC For Sale<\/td>\n<td>P2P Lending License<\/td>\n<td>Payment Gateway License<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p style=\"text-align: justify;\"><strong><span style=\"text-decoration: underline;\">RBI Update:<\/span><\/strong><\/p>\n<p style=\"text-align: justify;\">RBI has issued notification dated 13\/04\/2016 regarding Overseas Direct Investment (ODI) by Resident Individuals wherein RBI has rationalized and revised Form ODI which now comprises of Five sections instead of six sections.<\/p>\n<p style=\"text-align: justify;\">Nidhi company is the cheapest and easiest form of NBFC. It is very easy form to register and does not require much capital. Anybody can register a Nidhi company with only 5 lakh capital and 7 members.<\/p>\n<p><strong>Final Thoughts<\/strong><\/p>\n<p>Being a Nidhi Company is not easy; one must adhere to a vast number of Nidhi laws and regulations in a timely manner. It is critical for a firm to comply with all Nidhi company requirements; else, the company would face severe consequences.<\/p>\n<p>Because the RBI oversees a Nidhi&#8217;s actions, there is no room for error on the part of the company. Delegate compliance to us if you don&#8217;t want to face costly penalties. We&#8217;ll walk you through the compliance requirements and assist you in filing your annual taxes.<\/p>\n<p>The incorporation of a Nidhi Company is made considerably easier by enlisting the help of an experienced professional. Even if you understand the notion of Nidhi registration, there&#8217;s a chance you&#8217;ll make a mistake. As a result, cling to RJA services to make Nidhi Company Registration easier. We offer a special package that will assist you with the incorporation of Nidhi.<!--more--><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; Complete Guide on Nidhi Company Rules and Regulations Nidhi Company is an another Non-Banking Financial Company (NBFC) formed under Section 406 of the Companies Act of 2013. It rules and regulations are governed by the Ministry of Corporate Affairs (MCA). Furthermore, the Reserve Bank of India oversees deposit acceptance and makes new Nidhi modifications. &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18,208],"tags":[9926,6],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/2402"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=2402"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/2402\/revisions"}],"predecessor-version":[{"id":18710,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/2402\/revisions\/18710"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=2402"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=2402"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=2402"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}