What is a Nidhi Company?

A Nidhi companybelongs to the category of non-banking finance firms.Recognized under Section 406 of the Companies Act, 2013, it is governed by the centralgovernment. The basic business of such a company is to facilitate lending money between the core members of the company.Examples of a Nidhi Company are permanent funds, mutual benefit funds, a mutual benefit company and benefit funds.

The core idea behind creating a Nidhi Company is to receive funds (deposits) from members or lend to them, for the mutual benefit of both parties. All lending and borrowing must comply with rules laid downinChapter XXIV of Company Rules, 2014.

The financial dealings and all the registration processes of a Nidhi company are regulated by the Ministry of Corporate Affairs. A Nidhi Company must accumulate 200 members within a year of its formation.If it fails to do so, it needs to apply for permission to extend the time limit to acquire more members.A Nidhi Company must have an equity share capital of Rs. 5 lakh on inception. This entire amount must be paid-up./p>

  • One DSC & three DINs
      The directors must be registered with the MCA
  • Company Name Reservation
      We will then help you pick a unique name
  • Discussion on Class
      Advice on the classes you need to apply under
  • Final Application
      Filing the forms with the Registrar
  • RBI Approval
      We will get in principle approval from RBI

6 Essential Facts on Nidhi Company Registration

You need to appoint a minimum of three directors and have seven shareholders. So, a total of 10 individuals are needed to form a Nidhi. You need to register the company as a limited company under Companies Act, 2013. Nidhi Companies take almost a month or even longer to register.

Yes, you can expand operations.A minimum of three branches can be opened in a particular district. In case you want to expand outside the district or want to open more than three branches, intimation needs to be issued 30 days prior to opening to the Registrar of Companies.

The conditions laid down by the Act says that a Nidhi company should acquire a minimum of 200 members within one year. However, in case you have not been able to acquire the required numbers, you can apply for an extension with the authorities.

Any person can deposit, lend or borrow money through the provisions provided by Companies Act, 2013. They can all become members of the Nidhi provided they are not a corporation or a company.

A Nidhi can accept deposits not exceeding 20 times of its net owned assets as mentioned in the last audited statements.

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