Nidhi Company Registration

Nidhi Company is a company registered under the Companies Act, 2013 and has the sole objective of cultivating the habit of thrift and savings amongst its members. Nidhi companies are allowed to take deposit from its members and lend to its members only. Therefore, the funds contributed for a Nidhi company are only from its members (shareholders) and used only by the shareholders of the Nidhi Company.

Features

1. Nidhi Company can’t deal with chit funds, hire-purchase finance, leasing finance, insurance or securities business. It is strictly prohibited from accepting deposits from or lending funds to, any other person except members.

2. The minimum number of members required to start a Nidhi Company is 7 and out of these, three members must be the directors of the company.

3. A minimum of INR 5 lakh is required as the equity share capital to start a Nidhi Company.

4. Nidhi Company can’t issue preference shares.

Benefits

• No minimum share capital requirement

• Transfer of Ownership is easy

• Post registration, the applicant gets tax benefits

• There is no stamp duty

• There are clear objectives for easy donations and loans

• Relaxation in Compliances

Documents Required

1. Identity proof of Directors and Shareholders

   • PAN Card for Indian Nationals

   • Passport for Foreign Nationals

   • Proof of nationality for Foreign Nationals

   • Proof of Identity (Voter ID/Passport/Driving License) (any one)

   • Resolution of the board of company / LLP for authorization of director/partner

   • 2 Passport size photos.

2. Proof of Registered office

   • Lease deed/Rent Agreement

   • Copy of the utility bills (Telephone/Gas/Electricity bill)

   • NOC from Landlord

3. Address proof of Directors and Shareholders

   • Bank statement/Electricity/Telephone/Mobile bill) 

4. Director Identification Number (DIN) of the directors

5. Memorandum of Association of the company (MoA)

6. Articles of Association of the company (AoA)

Application Procedure

1. Obtain DSC (Director Signature Certificate) and DIN (Director Identification Number)

First of all, the partners have to apply for Digital signature and DPIN for Nidhi company.

Physical documents are signed manually, similarly, electronic documents, for example e-forms are required to be signed digitally using a Digital Signature Certificate.A digital certificate can be presented electronically to prove one’s identity, to access information or services on the Internet or to sign certain documents digitally.

Apply for DSC from any of the DSC Certifying Authority.

DIN refers to Director Identification Number issued by MCA( Ministry of Corporate Affairs). If the directors already have DSC and DIN, then this step can be skipped. DSC is required to be taken for the directors and shareholder of the company, who is required to sign the e-form for registration before filing incorporation application for the company. Photo, ID and Address proof is required to along with DSC application form for issuance of DSC. This process can be applied here.

2. Name approval

Now the next step is to get a suitable name approved from MCA . The proposed names should suitable and suggestive of company businessas per the name availability guidelines issued by MCA. Every Company incorporated as a “Nidhi” shall have the last words ‘Nidhi Limited’ as part of its name.

Name approval can be obtained in 3 to 5 working days. An approved name is valid for a period of 20 days from the date of approval, for a new company. It is permitted to apply for two proposed names and one Resubmission (RSUB) while Reserving Unique Names for companies through the RUN web service. 

3. Submit Incorporation Documents

The applicant needs to submit the application for registration/incorporation of Nidhi company i to Registrar of Companies (ROC) along Memorandum and Article of Associations, declaration, affidavits etc. Also, the Registrar of Companies may require the applicant to furnish the approval  of any department, or  Ministry of the Central or State Government(s) in relation to the work to be done.

4. Certificate of Incorporation

Once the documents are submitted to the Registrar, he then scrutinizes the incorporation form and documents, if he finds the documents are in order, he would issue the Certificate of Incorporation which is the Registration certificate of Nidhi company. It typically takes 15- 25 days to get the incorporation certificate of Nidhi Company. The certificate of Incorporation contains the Corporate Identity Number (CIN) of such Company. After receiving the certificate of Incorporation, the Nidhi company is set to start its function. 

5. PAN & TAN of the company

PAN and TAN should be simultaneously applied along with the application for registration of the company and would be issued along with Certificate of Incorporation.

Time Required

It usually takes 10 to 15 days to register a Nidhi Company.