Checklist: How To Register Nidhi Company?

ByJyoti Singh
How To Register Nidhi Company

The Nidhi Company operates on the basis of mutual benefit. Typically, such businesses are found in southern India. You can register it as a public corporation, but the last word of the name must be ‘Nidhi Limited. So, for Nidhi company registration in India you must take the assistance of online ca services.

If you want to How to Register for Nidhi Company?, you should familiarize yourself with the Nidhi Company Registration Checklist. A Nidhi Company is a type of Non-Banking Financial Company (NBFC) that was designed to give and take money to its members. It instills in its members the habit of saving money.

The best benefit of forming a Nidhi Company is that you won’t have to apply for a license from the Reserve Bank of India (RBI). So, basically, we’re going to talk about the requirements for Nidhi company registration in India in this article. The following are the subjects covered:

  1. Documents assembling and collecting for the establishment of a Nidhi company.
  2. Minimum prerequisites for registering a Nidhi company in India.
  3. Consider these factors when choosing a name for Nidhi Company.
  4. After acquiring Nidhi Company Registration what are further requirements?

Benefit of incorporating a Nidhi Company

There are numerous more benefits to forming a Nidhi Company. Some of them are as follows:

  • Higher Credibility – Nidhi companies have a higher level of credibility than other member-based organizations such as Trusts, Cooperative Societies, and Non-Governmental Organizations.
  • Fewer Regulations – The provisions of the Nidhi Rules, 2014 govern and regulate Nidhi enterprises. For the sake of controlling its activities and operations, the Central Government serves as the apex regulating authority. The Reserve Bank of India has only a few rules for Nidhi to follow.
  • Quick Processing – Borrowing, and lending to known people in the same group is a lot easier than dealing with banks, where the method is predetermined, impersonal, and rigid.

Incorporation requirements: How to Register Nidhi Company?

Before forming a Nidhi company, keep the following points in mind. Pre-requisite for the formation of a Nidhi company :

  • A minimum of seven stockholders is required.
  • The Directors required for Nidhi company formation are three minimum.
  • The minimum amount of capital required is Rs. 5 lakhs.
  • DIN stands for Director’s Identification Number.

Requirements Following the Formation of a Nidhi Company :

  • At the end of the first year, the minimum number of shareholders required for incorporation is 200.
  • The net-owned fund must be in excess of Rs. ten lakhs.
  • The Net Owned Funds to Deposit Ratio must be more than 1:20.
  • Unencumbered deposits must account for at least 10% of total deposits.

Documents required for Nidhi company registration in India

How to Register Nidhi Company? To complete the registration process you have to assemble all the important documents which are as follows:

  • Ownership paperwork or a rent or lease agreement could serve as proof of the registered office.
  • The landlord’s No-Objection Certificate (NOC) is required.
  • All of the members’ photos are needed
  • Members’ proof of identity is required.
  • All members’ PAN cards should be assembled.
  • All of the directors and shareholders have a Digital Signature Certificate (DSC).
  • A copy of each member’s address proof is required.
  • The directors’ DINs (Director Identification Numbers).
  • A copy of the company’s Memorandum of Association (MoA) and Articles of Association (AoA).

Mandatory Compliance for Nidhi Company

Following are the mandatory compliances to Nidhi company registration in India–

  1. NDH 1 – Within ninety days of the end of each financial year, the Nidhi Company is required to produce a list of members.
  2. NDH 2 – In the event that Nidhi Company is unable to acquire 200 members in a year, the company can now extend the period from the Ministry of Corporate Affairs (MCA).
  3. NDH 3 – In addition to the above forms, Form NDH 3 requires a half-yearly return to be filed.
  4. Annual Returns of the Registrar of Companies – A Nidhi Company is expected to submit a year-end return with the MCA with the help of Form MGT-7.
  5. Financial Statement and Balance Sheet – The financial statements, as well as any other associated documents, must be presented in Form AOC-4.
  6. ITR Reports – Nidhi Company is required to submit yearly return reports by September 30th of each year.

Important Restrictions on Nidhi Company Registration

A Nidhi is not permitted to engage in any of the following activities:

  • To operate a chit fund, hire purchase, lease finance, insurance, or securities acquisition firm.
  • To issue debentures or preference shares.
  • Not allowed to open the member’s current account.
  • To accept deposits from or lend money to anyone who is not a member.
  • To publish any type of advertisement
  • Not allowed to enter into a contract or pay a commission to solicit any type of deposit.
  • Putting any of the assets provided by its own members up as collateral.

For updates on How to Register Nidhi Company? you can take advice and consultation from an online chartered accountant or Get in touch with online ca services. They will help you in the complete processing of Nidhi company registration in India. Legalpillers is the leading online portal for the same login to the website and fills a form of requirement.