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NIDHI COMPANY REGISTRATION

Starting a finance business or want to legalize your existing finance business, then you are at the right door as Nidhi Company is the only available option to start a finance business legally that too without the Reserve Bank approval.

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Timeline - 10 to 15 Working days

WHAT IS A NIDHI COMPANY ?

Nidhi Company is one of the category of Non Banking Financial Company (NBFC) which does not require any Reserve Bank of India (RBI) license. Nidhi Company works through its members. It can accept deposits and lends loans to its members only.
The companies doing Nidhi business, viz. borrowing from members and lending to members only, are known under different names such as Nidhi, Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. Nidhis are more popular in South India and are highly localized single office institutions.

ADVANTAGES

Advantages of Nidhi Company

  • Unlike other NBFCs, Nidhis don’t have to obtain a license from RBI. They just have to incorporate themselves as a public company with the MCA with the required capital as per Nidhi Rules 2014
  • The loans given to the members are at a lower rate of interest than the market rate. This brings greater savings to the members.
  • A Nidhi company has ‘perpetual succession’, that is uninterrupted existence until it is legally dissolved. A Nidhi company is unaffected by the death or other departure of any member.
  • A Nidhi Company is a legal entity and a juristic person established under the Act. Therefore, a Nidhi company has wide legal capacity and can own property and also incur debts.
  • The main aim of such companies is to promote the habit of saving and thrifts among lower and middle section of the society.
  • Personal assets of the shareholders will not be at risk, in the event of the company facing financial distress. Liability of the shareholder is limited to the unpaid amount on his shareholding.

PRE-REQUISITES

Pre-requisites Of Nidhi Company

  • The objective of such a firm would be to imbibe in the members a habit of thrift and saving and the services would only be restricted to its members.  
  • A minimum capital of Rs. 5,00,000 is required to incorporate a Nidhi Company.  
  • A Nidhi company has to be a public company                   

DOCUMENTS

What are the Documents required for Formation of Nidhi Company?

  • PAN card and Residence Proof of directors of the company
  • Copy of Rental Agreement / EB Card Copy of Registerd Office
  • Copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
  • Passport-size photograph of the Directors
  • Specimen signature (blank document with signature - directors only)
  • Copy of Passport (In case of Foreign Director)

INCLUSIONS  

WHATS INCLUDED IN THIS PACKAGE ?

  • Verification of Documents
  • DSC and DIN for 2 Directors
  • Name approval and ROC fees
  • Drafting MOA & AOA
  • Following until Certificate is allotted
  • Applying PAN & TAN

PROCEDURES

What is the process for Nidhi Company Registration?

Applying DIN&DSC

DSC and DIN for all directors are required.

Name Approval

4-6 proposed names should be provided that should be unique and suggestive of company business.

MOA,AOA&AFFIDAVIT

Memorandum and Articles of Assocication should be drafted. Affidavit and declaration by first subscribers and Directors should be prepared

Company Registered

Once the application is duly filed and accepted by ROC, certificate of incorporation is issued and the company is all set to start it’s operations.

Apply for PAN, TAN and Bank accounts

Then you need to apply for PAN and TAN. PAN and TAN are received in 7 working days. Post this, you can submit the Incorporation certificate, MOA, AOA and PAN with a bank to open your bank account.

FAQ's

A nidhi company, is one that belongs to the non-banking Indian finance sector and is 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.

Any person above 18 years can become a director. Non-residents can also become director of Indian companies.

ID proof and residence proof of all the proposed directors, PAN card is mandatory for Indian nationals. No objection certificate from the owner of registered office or lease agreement must be produced.

Digital signature is process to authenticate and validate records electronically. DSC is required for every director of the company as the Ministry of Corporate Affairs (MCA) mandates digital signature of directors on some documents.

A Chit fund is a kind of savings scheme practiced in India. A chit fund company is a company that manages, conducts, or supervises such a chit fund, as defined in Section of the Chit Funds Act, 1982. … In Kerala, chitty (chit fund) is a common phenomenon practiced by all sections of the society.

The dividends earned in a chit are not taxable. If you want to claim the bid as loss then these dividends has to be shown as revenue income in the assessment. Hence the entire dividend earned in a chit is not taxable if you don’t claim the bid amount as loss.

A private limited company must have a minimum of 2 directors while the maximum no. of directors can be upto 15.

Company’s proposed name should be unique i.e., it should not be identical to any existing name. Names that infringe others’ rights, trademarks or patents are likely to be rejected by ROC

DIN is a unique identification number which is allotted to all the directors existing or proposed. DIN can be obtained by filing e-form DIN1 in MCA portal.

Chit funds in India are governed by the Chit Funds Act, 1982. Under this Act, thechit fund businesses can be registered and regulated only by the respective State Governments. Regulator of chit funds is the Registrar of Chits appointed by respective state governments under Section 61 of Chit Funds Act.

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Timeline - 10 to 15 Working days

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