How to Register a Nidhi Company?
Do many people keep asking that How to Register Nidhi Company?
Has the process of company registration changed?
So here we have full details which will give you a guide about how to register a Nidhi company in India. But before that, understand what Nidhi company is?
A Nidhi Company is a non-banking financial institution (NBFC). It was created with the purpose of borrowing and lending money to its members. It introduces the habit of saving in its members and operates on the mutual benefit premise. These businesses are mostly found in the southern United States. Nidhi Company does not require a license from the Reserve Bank of India (RBI), making it simple to establish. A public business should have “Nidhi Limited” as the last word in its name.
Incorporation of a Nidhi Company in India
In order to form a Nidhi Company in India, it must have at least seven members, three of whom must be designated, directors. The Nidhi Company, on the other hand, should have at least 200 members during the first year of operation.
A minimum equity share capital of Rs. 5 lakh is required for the registration of a Nidhi Company. However, within one year of registration, the Net Owned Funds (NOF) must be increased to Rs 10 lakhs. To register as a Nidhi Company in India, you must first form a Limited Company under the Companies Act of 2013.
It is vital to ensure that the purpose stated in the Memorandum of Association is to promote the habit of thrift and saves among the members, receiving and lending only for the mutual benefit of the members during Nidhi Company Registration.
Following its incorporation as a Limited Company, the Nidhi Company must meet the following requirements:
Have at least 200 shareholders (members).
Have a net worth of at least ten lakh rupees.
Have encumbered deposits equal to or greater than 10% of total deposits.
Maintain a net-owned-funds-to-deposit ratio of no more than 1:20.
Steps: How to Register Nidhi Company?
When you think of registering a Nidhi Company in India always take assistance of professionals who provide ca services, they will guide you better. See how ?
Step 1: Documentation Verification
When you decide to register Nidhi company with help of an online chartered accountant or online ca services is Documentation verification. A proper discussion with the company registration expert is required. The Professional will help you accurately in this.
For Nidhi Company Incorporation in India, you only need to submit a few simple documents. The following are the necessary documents.
Directors PAN Card
Adhaar Card or Voter ID of Directors
Email Id and Contact Number of Directors
Updated Bank Statement or Electricity Bill
Office Electricity Bill
NOC or Rent Agreement of registered office
Proof of Other ownership, if any
Above mentioned are some documents which need to provide by you for the purpose of company registration.
Step 2: Digital Signature Creation (DSC)
After the documents have been confirmed, we shall proceed to the creation of digital signatures. For company incorporation, every director must have a digital signature.
Step 3: Preparation of Application
After the DSC has been formed with directors and other members, professionals must prepare an application and other supporting documents.
Step 4: Waiting for approval from MCA
After completing the application, it must be submitted to the MCA department together with the required fees. MCA would give their clearance after proper verification.
Benefits of a Nidhi Company Registration and Incorporation
After understand that How to Register Nidhi Company? you must see the benefits of its registration and incorporation :
Borrowing Money Is Better value for money: As a member, you can borrow money for a fraction of the cost of borrowing money from a bank. This can be a significant benefit in times of need because various members of the mutual benefit society are likely to require funds at different periods.
Savings Encouragement: It encourages all of its members to save money and live a frugal lifestyle. After all, a Nidhi Company is a mutual benefit society in which members can give or borrow money and accept financial assistance from one another.
Fewer Complications: Borrowing and lending to known people in a structured setting are far less difficult than dealing with banks or in an unstructured setting. When members of a Nidhi Company need money, they can open the opportunity of their money and benefit from decreased interest rates.
Recent Updates on registering Nidhi Company
17th March Nidhi Companies must adhere to strict compliance guidelines: Strict Nidhi Company Compliance Standards To protect investors’ interests, the Ministry has encouraged them to verify a Nidhi Company’s status before injecting money into it. They can confirm it by looking at the actual gazette notice.
Timeframe for filing Form NDH-4: March 21st To improve transparency and investor friendliness, Nidhi firms are now required to adhere to the timeframe for completing Form NDH-4. A Nidhi Company will not be able to file Form No SH-7 and Form PAS-3 if they do not comply.
Conclusion
In a Nidhi company, some activities are prohibited. Nidhi Company is unable to conduct business in the areas of chit funds, hire-purchase finance, leasing finance, insurance, or securities. Accepting deposits from or lending money to anyone other than members is absolutely banned. It also can’t publicize itself to solicit deposits. So, before registering any type of company you must conduct research or consult an online chartered accountant or take online ca services. Please consult once before initiating the process.
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