What is Nidhi Company?

It is a company classified as an NBFC (a Non-banking financing company) and registered under Section 406 of the Companies Act 2013. The main business of such a company is to facilitate lending money between the core members of the company. This way, members (or shareholders) are encouraged to save money and invest them within the company. The company then uses these deposits for its members (or shareholders) to provide loans or advances and to acquire government-issued stocks/bonds/debentures/securities. It is regulated by the Ministry of Corporate Affairs, while the RBI monitors all its financial dealings.

Benefits of a Nidhi Company

Cheaper To Borrow: As a member, one can borrow money at a minimum rate, relative to the rate at which banks lend money. This can be a major advantage in times of need, as different individuals in the mutual benefit society are likely to need funds at different points in time.

Encourages Savings: It encourages all its members to save money and encourages a thrifty lifestyle.A Nidhi registration, after all, is a mutual benefit society wherein members can lend or borrow money and accept financial aid amongst them.

Fewer Complications: Borrowing and lending to known persons, where the procedure is fixed, is much less complicated than dealing with banks or in an informal setting. A nidhi company incorporation enables its members to unlock the potential of their money and gain from lower interest rates when they require money themselves.

What Is the Checklist for a Nidhi Company in India?

• At least seven members are mandatory to form a Nidhi registration. Out of these, three should be designated as the directors. However, it should acquire a minimum of 200 members within one year of commencement.
• Moreover, the company should have a minimum equity share capital of Rs 5 lakhs, for the Nidhi company registration process. This entire amount has to be paid up. However, the Net Owned Funds (NOF) must be increased to Rs 10 lakhs within a year of Nidhi Registration.
• a.At least 10% of its outstanding deposits should comprise unencumbered term deposits
• b.The prescribed NOF to deposits ratio should be 1:20.

This includes equity share capital and free reserves and excludes accumulated losses as well as intangible assets.

• At least 10% of its outstanding deposits should comprise of unencumbered term deposits
• The prescribed NOF to deposits ratio should be 1:20. where 10% of the total deposits are in a fixed deposit account of a nationalized bank.

6 Things e-Nidhi Cannot do as an NBFC

A nidhi company registration cannot deal in the following:

• Chit fund business
• Hire purchase finance
• Acquisition/insurance of securities issued by any corporate
• Engaging as an NBFC in the business of advances or loans
• Leasing finance
• Acquisition of stocks/shares /bonds/securities/debentures issued by any local authority /Govt./marketable securities.

Process for e_Nidhi Company Registration with Vakilsearch

Contrary to what you might think, registering a Nidhi registration is a simple 3-Step process and can be done completely online. We’ve laid it out below.

• Name Reservation – We help you reserve your name with MCA.
• DSC and DINs – We help you get 1 DSC and 3 DINs.
• Documents and approval – We help you at every stage of the documentation process and in getting in-principle approval from the RBI.

Documents Required for Nidhi Company Registration Online

To Be Submitted By All Directors

• Self-attested copy of PAN Card is very important for e nidhi registration process
• Self-attested copy of Driver’s License/ Voter ID/ Aadhaar Card/Passport is very important for e nidhi registration process
• Self-attested copy of Bank Statement/ Telephone Bill/Mobile Bill/ Electricity Bill is very important for e nidhi registration process
• Passport-size Photograph is very important for e nidhi registration process
• Specimen Signature Certificate is very important for e nidhi registration process

Nidhi Company Registration Fees in India

Nidhi company in India's registration charge is a very simple and easy process. The main thing you need to do is to find a good Company Registrar who can help you with the whole process. You can easily find a Company Registrar in your locality. After finding a good Company Registrar, the next thing you need to do is to fill up the required forms and pay the required fees. The fees for registering a Nidhi company in India are very nominal. You can easily find the required forms and pay the fees online. Once you have registered your Nidhi company in India, you will be given a Certificate of Incorporation. This certificate is very important and proves that your Nidhi company has been registered in India. After getting the Certificate of Incorporation, as per Nidhi company compliances, you can start operating your Nidhi company in India.

There is Nidhi registration charge that all the companies must pay in India. The Nidhi company registration fees vary from state to state but are typically between ₹5,000 and ₹10,000. Along with e-nidhi registration Charges, Nidhi companies are also required to pay an annual maintenance fee as Nidhi company compliances, typically between ₹1,000 and ₹2,000.

Why Vakilsearch?

Access To Experts

We provide access to reliable professionals and coordinate with them to fulfill all your legal requirements. You can also track the progress on our online platform, at all times.

Realistic Expectations

By handling all the paperwork, we ensure a seamless interactive process with the government. We provide clarity on the nidhi company registration process to set realistic expectations.

300-Strong Team

With a team of over 300 experienced business advisors and legal professionals, you are just a phone call away from the best in legal services.

Recent Updates

17th March: Stringent compliance norms for Nidhi Companies

To protect the interest of investors, the Ministry has advised them to verify a Nidhi Company status before pumping in money. They can verify it from the notification in the official gazette.

21st March: Time-frame for filing Form NDH-4

To enhance transparency and investor-friendliness, Nidhi companies are now instructed to follow the time frame for applying in Form NDH-4. In case of non-compliance, a Nidhi Company will not be allowed to file Form No SH-7 and Form PAS-3.