Nidhi company Key Overview before the Nidhi Company Incorporation

Key Overview before the Nidhi Company Incorporation

Key Overview before the Nidhi Company Incorporation

Complete Understanding of Nidhi Company Registration

Overview

Nidhi Company is a mutual benefit company, where members can borrow money from each other to fulfil their financial needs.

Reserve bank of India has mandated that no company can carry on the finance business unless and until it is reserved with the Reserve bank of India as Bank, NBFC, or Microfinance company. But this requirement is not applicable to Nidhi Company. So, A Nidhi company is allowed to lend and borrow money from its members.

One Important point to be noted here is that the Nidhi Company can only lend and borrow money from its members only. Cannot lend or borrow money from an outsider.

Documents Requirements for Nidhi Company formation 

The following documents shall be required for incorporation of Nidhi Company:

1 Consent to act as director from each of the first  Directors

2 Copy of PAN Card for each of the directors and subscribers

3 Copy of Address proof (Utility bill/ Bank Statement) for each of the directors and subscribers

4 Copy of Identity proof (Driving License / Voter Card / Passport ) for each of the directors and subscribers

5 Copy of Utility bill for the registered office of the Company

6 Rent Agreement, if any along with NOC for the registered office of the Company.

7 Declaration by each of the subscribers to the memorandum regarding Compliance to Nidhi Rules 2014 and Companies (incorporation) Rules, 2019.

 8 Declaration by each of the subscribers to the memorandum 9 Declaration by each of the subscribers and First Directors in Form INC-9

The requirement for Nidhi Company Registration

The following are the minimum requirements for the Incorporation of Nidhi Company:

1 Minimum Directors: For incorporation of Nidhi Company at least three directors shall be required.

2 Minimum Capital requirement: A minimum paid-up capital of INR 500000 shall be required for incorporation of Nidhi Company

3 Minimum subscribers: A minimum of 7 members shall be required for incorporation of Nidhi Company.

4 Use of Word Nidhi: The name of the Company shall include the word “Nidhi”.

5 Main Objects: The main objects must be related to carrying on the business of Nidhi Company.

Step by step process for the incorporation of Nidhi Company

Step 1: Apply for the name reservation of the Company using the RUN facility on the MCA Portal

Step 2: After name reservation, prepare draft documents for Filing to ROC

Step 3:  Apply for DSC of all subscribers and First directors

Step 4: Collect KYC Documents and other signed documents

Step 5: Prepare SPICE+ form using SPICE+ functionality 

Step 6: Upload Form on MCA Portal

Step 7:  After verification of the Form, if MCA finds any discrepancy, then it will send the form for resubmission, and if MCA with satisfied with the Form, then it will approve the form and issue a Certificate Of Incorporation.

FAQ On Nidhi Company Incorporation

Q 1 How much time will it take to register a Nidhi Company?

Ans It takes only 7-10 days to complete the whole process for registration of Nidhi Company.

Q 2 Do we require any Approval from RBI for the formation of a Nidhi Company?

Ans No, RBI approval is not required for the incorporation of Nidhi Company.

Q 3 Can a Nidhi Company Lend or Borrow Money from any person?

Ans  Nidhi Company can Lend or Borrow Money only from its members.

Q 4 Is there any minimum capital requirement for the Registration of Nidhi Company?

Ans Yes, there is a minimum capital requirement of INR 5 lac for the incorporation of Nidhi Company.

Q5. What are the Nidhi Companies not allowed to do?

Ans: Nidhi Companies are not allowed to carry out the following transactions

  • Obtaining into a joint venture for lending as well as lending activities
  • Hire-purchase business
  • Invite and accept deposits out of their own members instead of from other members.
  • Acceptance and lending of corporate deposits
  • Starting forward for any company other than having to borrow and loaning to its members
  • Going to open your current account with your members
  • Insurance business
  • Lotteries business Activity
  • Going to issue debts, preference shares, or some other debt instruments
  • Mobilization of deposits, payment rates, benefits, and commissions
  • Paying the amount of the brokerage to grant loans to members
  • Involvement in Chit Funds Business and subletting

Know about the annual compliance of NIDHI COMPANY

https://carajput.com/learn/complainces-of-nidhi-company-as-per-companies-act-2013.html

How Rajput Jain and Associates can Assist

We offer all kinds of Consultancy, Compliances, and Registration Services in relation to Nidhi Companies. We have impanelled various experts to provide expert advisory, Registration, and Compliances services for Nidhi Companies.

The services included in Nidhi Company registration are:

  1. Name Reservation
  2. Preparation of Draft documents for Submission to ROC
  3. Preparation of forms for Submission to ROC
  4. Drafting of MOA And AOA of Nidhi Company
  5. DIN Application (up to 3 Directors)
  6. 6 Issuance of COI, PAN TAN 
  7. DSC of all subscribers
  8. Followup department and Approval
  9. Advisory relating to Nidhi Company

Rajput Jain and Associates: Made and posted By Expert : 

Mr. Akshay Gupta (Company Secretary) is a diligent and innovative qualified Company Secretary, striving in matters related to Corporate Law. Akshay takes a deep interest in corporate, NBFC and FDI matters and his specialization includes corporate Compliance, FEMA Compliances, and NBFC Registration. As a Company Secretary, Akshay is passionate about matters relating to corporate funding, NBFC, and its compliances

Disclaimer: The content of this post isn't considered to be professional or legal advice, We aren't responsible for any damages arising from your access to the location content & must not be relied on or used as a substitute for legal advice from a lawyer professional in your jurisdiction. CARajput is among India's big digital compliance services platform which committed to helping people have started & developed their businesses. We had started with the goal of creating it easier for start-ups to start out their business. Our main aim is to assist the businessman with applicable laws & regulations compliance and providing support at each & every level to make sure the business stays compliant and growing continuously. For any query, help or feedback you may in touch on singh@carajput.com or Call or what’s-up on 9-555-555-480

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