Nidhi Company Registration Process and What is Nidhi Company?

Nidhi Company Registration process is the first step towards the formation of a new company. Find out how to register your company with the Ministry of Corporate Affairs. A Nidhi company is the one that belongs to the non-banking finance sector and is recognized under 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 benefits funds, and Mutual benefit companies. They are regulated by the Ministry of Corporate Affairs, Government of India. Nidhis are most popular in south India and are highly localized single office institutions. They are mutual benefit societies because their dealings are restricted only to the members and membership is limited to individuals. The loans are given for the purpose of housing construction or repairs and are generally secured.

Nidhi Company Registration process is one of the most preferred options for entrepreneurs to start their business in India. If you are looking for the Nidhi Company Registration service, you are at the right place. You can check below the Nidhi Company Registration Process 

No RBI approval is required to register the company, as RBI has specifically exempted this category of NBFC in INDIA.

Nidhi Company Registration Process

Nidhi company registration process is simple and quick. Learn the steps to register the Nidhi company in IndiaFor the Nidhi company registration process, the normal procedure for registration of a public company is required, such as obtaining the availability of name, filing of MOA and AOA, and other documents.

Care must be taken to see that the object clause of the MOA should restrict itself to the object of cultivating the habit of thrift and savings amongst its members. The name of the company should end with “ NIDHI LIMITED”.

Nidhi Company Registration process is one of the most important parts of starting up a business. If you are setting up a private limited company, you will need to register the company with the Registrar of Companies within 15 days of starting the business.

After Nidhi company registration, every Nidhi shall ensure that it has-

(a) Not less than 200 members.

(b) Net-owned funds of Rs 10 lakh or more.

(c) Unencumbered term deposit of not less than 10% of the outstanding deposit.

(d) Ratio of Net owned funds to deposit of not more 1:20.

Benefits of Nidhi Company Registration

1) A Nidhi company mobilizes small savings, most of the middle class, and disburses loans to eligible borrowers.

2) The repayment is guaranteed, as the loans are secured and due to peer pressure, borrowers ensure that the loans are repaid on due dates.

3) Nidhi companies offer a higher rate of interest on deposits. This makes it an attractive investment opportunity for people, especially senior citizens.

4) The board of directors of Nidhi company normally consists of senor persons who have experience in handling finance and who are well respected in social circles.

Branches of Nidhi 

i. A Nidhi company can open branches only if it has earned net profits after tax continuously for a period of 3 years.

ii. A Nidhi company can open up to 3 branches within the district.

iii. If Nidhi company proposes to open more than 3 branches within the district it should obtain the prior permission of the Regional Director.

iv. No Nidhi company shall open any branches or collection centers or offices unless financial statements and annual returns are filed with ROC.

v. A Nidhi shall close its branch only after giving any intimation to the registrar within 30 days.

Deposits in Nidhi Company 

1) The FD shall be accepted for a minimum period of 6 months and a maximum period of 60 months.

2) RD shall be accepted for a minimum period of 12 months and a maximum period of 60 months.

3) The maximum balance in a savings deposit account shall not exceed Rs. 100000 and rate of interest shall not exceed 2%.

4) A Nidhi company shall not repay the deposit within a period of 3 months from the date of acceptance.

5) The depositor shall not be entitled to any interest to 6 months from the date of deposit.

Loans in Nidhi Company 

1) The loans are provided only to the members of the Nidhi company.

2) The loans given by Nidhi company to the members are as follows;

(a) Where the total amount of deposit from members is less than Rs 2 crores- 2 lakhs

(b) Where the total amount of deposit by members is more than Rs 2 crores but less than Rs 20 crores- 7.5 lakhs

(c) Where the total amount of deposit made by the members is more than Rs 20 crores but less than 50 crores- 12 lakhs

(d) Where the total amount of deposit made by the members is more than 50 crores – 15 lakhs

3) A Nidhi shall give loans to its members against securities like gold, silver, jewelry, immovable property, fixed deposit, national savings certificate and other government securities and insurance policies.

4) The rate of interest charged on any loan given by Nidhi shall not exceed 7.5%.

 

Characteristics of Nidhi Company 

1. It is allowed to transact business only with its members and with nobody else.

2. Nidhi companies cannot issue preference shares.

3. They do not operate on an Indian basis.

4. They are incorporated as public companies with a minimum paid-up equity share capital of Rs. 5,00,000.

5. The loans provided by these companies are fully secured.

6. Nidhi can declare dividends not exceeding 25%.

7. A director of Nidhi company shall hold office for a period of 10 consecutive years.

Why Companify 

The private limited company registration process is completely online, so you don't even have to leave your home to get your entity registered. We at companify help you to take a step forward in owning your entity by providing a hassle-free process of company registration. our team of experts will guide you to make the finest decision. 


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