How to get Nidhi Company Registration in India?

Nidhi Company is a type of NBFC, and it is allowed to take deposits from its members and provide loans to its member. Nidhi Company is regulated under Section 406 of the Companies Act, 2013 and Company Nidhi Rules, 2014. Nidhi Company is also known as the Mutual Benefits Finance Company, and it does not require the license from RBI, which means it is easy to form. This company is registered as a Public Company and should have "Nidhi Limited" word at the last of its name. For Nidhi Company Registration minimum of seven members and three directors are required, and the Ministry of Corporate Affairs (MCA) issues the incorporation certificate to the company. Scroll down to check more information regarding Nidhi Company Registration.

Following are some benefits of Nidhi company registration:

• Limited Liability: The directors and shareholders are having limited liability Companies under the Act, 2013. In case if any company faces any loss or even any financial trauma, banks, creditors, and the government have no right to seize the personal assets of any of the directors and shareholders.
• Availability of funds is easy: Nidhi Company is the most accessible and secure way of accepting deposits from the general public. The only requirement is that they should be a registered member.
• Separate Legal Entity: Nidhi Company can own the property on its name, and it has the power to sue anybody and be sued by others. If the company is required for the fund, in that case, the company cannot ask its members for any type of contribution.
• Low level of risk in Non-payment of loans: According to the Nidhi Rules, 2014, the Nidhi Company can accept deposits and provide loans to its members. The risk of non-repayment of loans is very less as compared to other finance business.
• Registration is Cost-effective: The registration cost of Nidhi Company is pocket friendly.
• Easy formation without any complexity: The registration process of Nidhi Company is very easy without any complexities because the process requires less documentation from the beginning to end of the registration, and the registration process of Nidhi Company gets completed within one or two weeks. There is no need to attain a license from RBI.
• Perpetual Existence: If any member dies or departs, it will not affect a Nidhi Company as it has perceptual existence until the time it gets dissolved legally.
• Ease of Management: Bringing changes in Nidhi Company is not a matter of concern and worry, unlike other NBFCs.

Following are some pre-registration requirements for the Nidhi Company Registration:

• It requires a minimum of 7 members and minimum 3 directors.
• There is no minimum capital required.
• Not empowered to issue preference share.
• DIN for all the proposed directors.

Following are the important documents required at the time of Nidhi Company Registration in India:

• Submit NOC (No Objection Certificate) signed by the owner.
• Identity proofs of all the members such as Aadhar card, Voter Id, Passport, Driving License.
• Submit address proof of the members such as the latest electricity bill, water bill, telephone bill, etc.
• Latest passport size photos of the members.
• Submit the copies of PAN card of the members.
• Submit Digital Signature Certificate (DSC) of the directors.
• Submit Director Identification Number (DIN) of the directors.
• Memorandum of Association (MOA) and Articles of Association (AOA) of the company.
• Submit the copy of property papers.
• If the registered office is rented, then submit a copy of the Rent Agreement.

Following are the steps to complete the process of Nidhi Company Registration in India. Before the registration, make sure that you have all the essential documents as mentioned above.

Step 1: Name Search

The first thing about the registration process is to search and select at least three names for the registration process. Ministry of Corporate Affairs (MCA) will select one name only. The company's name must be unique and different from others. SPICE+ form will help in reserving the name.

Step 2: Obtain DSC and DIN:

After the 1^st step, obtain Digital Signature Certificate (DSC) And Digital Identification Number (DIN) of all the proposed directors because the whole registration process is online and done digitally.

Step 3: File SPICe 32 Form:

File the SPICe 32 form along with the following attachments for Nidhi Company:

• PAN card of the members.
• Address proof of the directors.
• Identity proof of the directors.
• Copy of Rent Agreement or Sale Deed of the registered office.
• Submit the latest electricity bill or water bill, etc. of the registered office.
• NOC of the registered office from the owner.
• Declaration form from the 1^st director in form DIR-2.
• Self-declaration from members and directors in form INC-9

Step 4: Obtain MOA and AOA

After getting name approval, the application gets submitted along with the MoA (Memorandum of Association) and AoA (Articles of Association) of Nidhi's company.

Step 5: Issuance of Incorporation Certificate

After the verification or inspection of all the documents and application form, the Incorporation Certificate will be an issue, and it will take 15-20 days to get the certificate.

Following are the post-registration requirements for Nidhi Company:

• Nidhi Company must have 200 members within 12 months of registration.
• The minimum NOF should be Rs. 10 Lakh or more than Rs. 10 Lakh.
• Net Owned Funds to deposits must be 1:20 ration. For example, if you have NOF of Rs. 10Lakhs, then your total deposit limit would be Rs. 2 Cr.
• It is not entitled to admit a trust, body, or a minor corporate as a member.
• Deposits should not be less than 10% of outstanding deposits.

Following are the lists of mandatory compliances for Nidhi Company:

• NDH 1: Submit the list of all the members of Nidhi Company with 90 days at the closure of the financial year.
• NDH 2: If a Nidhi company is unable to add 200 members in its first financial year, then the company can make a request to the Ministry of Corporate Affairs (MCA) for the extension of the members.
• NDH 3: In NDH 3 Form, a Nidhi company can also file a half-yearly return.
• Annual Returns: Through the form of MGT-7, a Nidhi company should file an annual return with the MCA (Ministry of Corporate Affairs).
• Balance Sheet: In Form AOC-4, a Nidhi company has to submit all the documents related to finance and submit the company's financial statement.
• Income Tax Returns: Nidhi Company must file annual returns in the financial year.

Nidhi Company promotes the habit of savings and utilizing funds for the future. Sometimes people are afraid of depositing in the Nidhi Company because the RBI does not license them. Nidhi Company is the most accessible and secure way of accepting deposits from the general public.