Registration of Nidhi Company Online
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You think lady’s kitty is all about fun, games, chit-chats and gossips? Well, this is not the case. With the idea of this they have cultivated a habit of saving among its members. Same is being done by Nidhi Company Registration but in more organized & legalized way. One of the simple and easy option to start a borrowing and lending business in India without obtaining RBI approval is Formation of Nidhi Company, Such Nidhi Company Incorporation accepts deposits and provide loans only to their members, it is prohibited from dealing with non-members. Know more about Registration of Nidhi Company here and if you have any question, book a consultation with our Nidhi Company Experts at Compliance Ease Cure LLP.
Definition: -
Nidhi means a Company which has been incorporated as a Nidhi:
“Nidhi” or “Mutual Benefit Society” means a company, which the Central Government may by notification in the Official Gazette, declare to be a Nidhi or Mutual Benefit Society, as the case may be. A Nidhi company is a type of company in the Indian non-banking finance sector, recognized under section 406 of the Companies Act, 2013 & their core business is borrowing and lending money between their members. They are also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. Along with Companies Act, 2013, these companies are regulated under the Nidhi Rules, 2014 issued by the Ministry of Corporate affairs.
GOVERNING LAWS:
Chapter XXVI of Companies Act 2013Section 406Nidhi Rules, 2014Nidhi Amendment Rules, 2022 w.e.f. 19th April, 2022The primary object of Nidhi Company is to carry on the business of accepting deposits and lending money to member, borrowers (against jewels) and mortgage of property etc. For over a century Nidhis, with the objective of cultivating the habit of thrift, generally promoted by public spirited men drawn from affluent local persons, lawyers and professionals like auditors, educationists, including retired persons etc. The area of operation was local – within municipalities and panchayats. The functions of a Nidhi company are similar to a bank, but the difference lies in the approach. The funding process starts when the members start contributing funds to the company. Those funds are later used to provide loans to the members.
The principle of mutual benefit has been incorporated to pool the savings from members and lend only to members and never have dealing with non-members. Nidhis were not expected to engage themselves in the business of Chit Fund, hire purchase, insurance or in any other business including investments in shares or debentures. As stated, these Nidhis do their business only with Members. Such Members are only individuals. Bodies Corporate or Trusts are never to be admitted as Members in these companies. Nidhi companies are effectively non-banking financial companies and are engaged in the business of accepting deposits and making loans to their members. The deposit taking activities of Nidhis are governed by the RBI Act and guidelines made thereunder.
CHECKPOINTS:
Pre-requisites for Incorporation as a Nidhi Company: -
Shall be a public Company;Shall have Minimum 3 Directors and 7 Shareholders for formation;Shall have minimum paid up capital of Rupees Ten Lakhs (Rs. 10,00,000/-) (*as per Nidhi Amendment, Rules 2022, prior to amendment it was Rupees Five Lakhs [Rs. 5,00,000/-] ;)Shall have the last words “Nidhi Limited” as a part of its name; andSuch Company shall not issue preference shares.Proof of Registered Office Address: - Copy of Utility bill not older than 2 months along with NOC and Proof of Office Address: Conveyance Deed/ Lease Deed/ Rent Agreement etc. along with rent receipts;Proof of First Directors and Subscribers not having DIN: - Proof of Identity (Voters Identity Card/ Driving License/ Passport); Proof of Address (Latest Bank Statement/ Telephone Bill/ Mobile Bill/ Electricity Bill); and PAN Card;DIR-2 (Consent to Act as Director of the Company) & Interest of such Directors in other entities;Other Declarations required as per Applicable Rules.Main Objects and Incidental or Ancillary Objects;The Main Object should be cultivating the habit of thrift and saving amongst its members & receiving deposits from, and lending to, its members only, for their mutual benefit;Authorised Share Capital of the Company;Details w.r.t Subscribers and Number of Shares Subscribed by them;Details w.r.t Professional witnessing the E-Form.E-AOA has option of adding, modifying, and deleting Articles; Table F, Schedule-1 of Companies Act, 2013 is applicable in case of Company Limited by shares;Details w.r.t Subscribers;Details w.r.t Professional witnessing the E-Form.(*In case number of Subscribers are more than Seven then physical copies of MOA & AOA needs to be attached)
Purpose of Form:
Application for GSTIN (Optional); EPFO, ESIC, Professional Tax (Mandatory for Companies registered in Maharashtra, West Bengal and Karnataka); Opening of Bank Account; Shop and Establishment Registration Number (only for Delhi location);
Specimen Signature of Authorised Persons for registration with EPFO;Proof of Identity and Address of Authorised Director for opening of Bank Account;Passport size photograph of First Directors;Purpose: Form for Declaration by First Subscribers & Directors as per applicable Rules;
Type:-
It is Web Based Auto Generated Form (In case if total number of subscribers and/ or directors exceeds twenty (20) and / or any such subscriber/ director has neither DIN/ PAN then it is required to be attached to Spice+ Part B)
Spice+ is the Web based Form which is required to be filled online, once all the details are filled, the E-Forms can be downloaded by clicking on download icon for affixing DSC’s and then such Forms can be uploaded like Normal other E-Forms after making payment of requisite fees.
Two names can be proposed in order of preference;The name shall end with the word “Nidhi Limited”;The proposed First Directors and Subscribers have to obtain Digital Signature Certificate (DSC);
Forms: - Spice+ Part B (INC-32) linked with Spice+ MOA (INC-33); Spice+ AOA (INC-34); Agile Pro-S (INC-35) and Form INC-9;
Purpose of Form: Application for: - Incorporation of Company; Allotment of DIN up to three applicants; PAN; TAN.
Authorised Share Capital;Subscribed Share Capital;Registered Office Address;Contact Details of proposed Company;Jurisdiction of Registrar of Companies based on the location of registered office of the Company.Number of Subscribers and First Directors having valid DIN and not having DIN;Personal details of First Directors and Subscribers;Number and amount of Shares subscribed by the Subscribers;Designation and Category of Proposed Directors.Area Code, Range Code, AO Type depending upon the location of registered office of the Company;Source of Income;Nidhi Companies are mutual benefit societies, because their dealings are restricted only to the members;Membership is limited only to individuals; Body Corporate cannot become its members;The principal source of funding is contribution from the members and loans are given to the members at relatively reasonable rates;Suitable for fulfilling the Financial Requirements of lower and middle income groups;Deposits mobilized by Nidhis are not much when compared to organized banking sector;As Nidhi Companies deal with Shareholder- members only, RBI has exempted the notified Nidhi’s from the core provisions of RBI Act.