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A Nidhi Company is a type of non-banking financial company (NBFC) in India that operates under Section 406 of the Indian Companies Act, 2013. It is designed to promote savings and provide loans to its members. Governed by the Nidhi Rules, 2014, these companies operate with the primary objective of encouraging thrift and mutual financial benefit among their members.
To register a Nidhi Company in India, at least seven members are required, and the company must have a net owned fund of at least ₹10 lakhs. Unlike other NBFCs, Nidhi Companies can only lend to and accept deposits from their members. They cannot engage in other financial activities or accept deposits from the general public. Although exempt from RBI registration, they must comply with specific regulations from the Ministry of Corporate Affairs (MCA).
Affordable Borrowing: Members of a Nidhi Company can borrow money at lower rates than traditional banks, making it a cost-effective solution during financial needs.
Promotes Saving: Nidhi Companies encourage their members to save money and develop a habit of thrift, fostering a community of mutual financial support.
Simplified Process: The registration process for a Nidhi Company is straightforward compared to other financial institutions, allowing members to efficiently manage their financial resources.
Step 1: Name Reservation: Reserve your desired company name with the Ministry of Corporate Affairs (MCA).
Step 2: DSC and DINs: Obtain a Digital Signature Certificate (DSC) and Director Identification Numbers (DINs) for the directors.
Step 3: Documents and Approval: Complete the documentation process to obtain in-principle approval from the regulatory authorities.
Nidhi Company registration can be done easily and affordably with the help of Taxtrix. Complete the necessary documentation and pay the online registration fees. After registration, you will receive a Certificate of Incorporation. There are also annual maintenance costs, which vary by state. Contact our experts to learn more about the registration fees.
By 2023, Nidhi Companies with a share capital of ₹10 lakhs or more must obtain a self-declaration from the central government before starting operations. They must file an application in Form NDH-4, ensuring a minimum of 200 members and a net owned fund of ₹20 lakhs. If there is no response from the government within 45 days, the application is considered successful.
Nidhi Companies are governed by the Nidhi Rules, 2014, while the RBI regulates the overall financial system in India. Nidhi Companies must maintain a minimum net owned fund of ₹10 lakhs and comply with various reporting and regulatory requirements imposed by the RBI.
The Ministry of Corporate Affairs (MCA) introduced the Nidhi (Amendment) Rules, 2023, modifying forms NDH-1, NDH-2, NDH-3, and NDH-4 to ensure better regulation and transparency.
Taxtrix is a trusted partner for Nidhi Company registration, offering expertise in legal services, streamlined processes, cost-effective solutions, and professional guidance to ensure compliance and smooth registration. Our commitment to customer satisfaction makes us a top choice for Nidhi Company registration.
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A Nidhi Company is a type of non-banking financial company (NBFC) in India that primarily deals with lending and borrowing money among its members. It is governed by Section 406 of the Indian Companies Act, 2013 and the Nidhi Rules, 2014.
Benefits include affordable borrowing, promoting savings among members, and a simplified registration process. Nidhi Companies provide financial assistance to their members at lower interest rates compared to traditional banks.
A minimum of seven members is required to start a Nidhi Company. Additionally, there must be at least three directors.
The minimum capital requirement for a Nidhi Company is ₹5 lakhs, which must be increased to ₹10 lakhs within a year of incorporation.
No, Nidhi Companies can only accept deposits from and lend to their members. They cannot accept deposits from or lend to non-members.
Nidhi Companies are not directly regulated by the RBI. However, they must comply with specific regulations from the Ministry of Corporate Affairs (MCA).
Documents required include self-attested copies of PAN cards, identification proof (driver's license, voter ID, Aadhaar card, or passport), recent bank statements, and passport-size photographs of all directors.
On average, it takes about 15-20 working days to register a Nidhi Company, provided all necessary documents are submitted on time.
A Nidhi Company can have a maximum of 200 members.
Yes, a salaried person can become a director in a Nidhi Company, provided there are no restrictions or conflicts of interest in their employment agreement.
The Nidhi (Amendment) Rules, 2023 were introduced by the Ministry of Corporate Affairs (MCA) to modify existing forms and ensure better regulation and transparency for Nidhi Companies.
While not mandatory, having a website can be beneficial for Nidhi Companies to provide information to members and enhance transparency.
Yes, a Nidhi Company can open branches, but only after fulfilling certain conditions such as profitability and compliance with regulatory requirements.
If a Nidhi Company fails to meet compliance requirements, it may face penalties, fines, or cancellation of its registration by regulatory authorities.
To safeguard investor interests, the Ministry of Corporate Affairs (MCA) has implemented strict compliance norms for Nidhi Companies. Investors are advised to verify the status of a Nidhi Company before investing. This can be done by checking the official gazette notification for the company's details.
To promote transparency and ensure investor protection, Nidhi Companies must adhere to the specified time frame for submitting Form NDH-4. Failure to comply with this requirement will result in the Nidhi Company being prohibited from filing Form No SH-7 and Form PAS-3, which are essential for certain corporate actions.
