Checklist Nidhi company registration online in India

• 1. Minimum 200 Members: Within one year from commencement, the company should have a minimum of 200 members.

• 2. Equity Share Capital: The company needs an equity share capital of at least Rs 5 lakhs. This entire capital must be paid up.

• 3. Net Owned Funds (NOF): Within one year from registration, the Net Owned Funds (NOF) should increase to Rs 10 lakhs.

• 4. Un-encumbered Term Deposits: A minimum of 10% of outstanding deposits should be in the form of un-encumbered term deposits.

• 5. NOF to Deposits Ratio: The prescribed ratio of Net Owned Funds (NOF) to deposits should be 1:20. Additionally, 10% of total deposits should be in a fixed deposit account of a national bank.

10 things that Nidhi Companies cannot do as a Non-Banking Financial Company (NBFC)

• 1. No Solicitation: Nidhi Companies cannot advertise or solicit deposits from the public.

• 2.No Druthers Capital or Debentures: Nidhi Companies are prohibited from raising funds using preference share capital or debentures.

• 3.Profit Requirement for Branch: A Nidhi Company cannot establish a subsidiary branch until it attains continuous profitability for three years.

• 4. Deposits from Non-Members: Nidhi Companies cannot accept deposits from non-members or individuals not associated with the company.

• 5. No Current Accounts: Members of Nidhi Companies cannot open current accounts under the Nidhi Scheme.

• 5. Prohibited Activities: Nidhi Companies cannot engage in activities such as hire purchase finance, acquisition of securities from corporations, and participating as an NBFC in loans and advances.

• 5. Acquisition of Securities: Nidhi Companies are restricted from acquiring stocks, bonds, shares, securities, and debentures issued by local authorities or government marketable securities.

Advantages of Starting of a Nidhi Company Registration in India

• Simplified Formation Process:

  Initiating Nidhi company or Nidhi registration in India is remarkably straightforward. The complexity level is notably lower compared to other finance-related businesses such as NBFCs.

• Promotes Savings:

  This company model actively encourages its members or shareholders to cultivate saving habits, fostering a culture of thriftiness. A Nidhi license essentially operates as a mutual benefit society, where members collaborate to borrow, lend, and provide financial assistance among themselves.

• Affordable Borrowing:

  As a member, one can access loans at a lower interest rate compared to bank lending rates. This advantageous aspect is particularly valuable during times of financial need, given the varying timing of individual fund requirements within the company or mutual benefit society.

• Simplified Process:

  The borrowing and lending processes among known individuals are streamlined and involve fewer complications compared to banks or informal setups.

• Micro Banking:

  Nidhi finance registration Companies extend banking services to remote and rural areas of India. Designed for distant locations, they offer financial access to those who might not easily reach nationalized banks or NBFCs.

Procedure for Nidhi Company Registration Online in India

• Step 1:

  Apply for Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) for the directors of the company.

• Step 2:

  Choose a unique name and seek Name Approval through the prescribed process.

• Step 3:

  Draft the Memorandum of Association (MoA) and Articles of Association (AoA), and file them with the Registrar of Companies (ROC), including the subscription statement outlining the main objective of forming the Nidhi company.

• Step 4:

  Obtain the Certificate of Incorporation (CIN), which usually takes around 15-25 days. This document signifies the successful creation of the Nidhi company and provides the company's identification number.

• Step 5:

  Apply for PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number) for the company. This process typically takes about 7 working days.

• Step 6:

  Open a bank account for the Nidhi company by submitting the MoA, AoA, Certificate of Incorporation, and PAN to the bank.

Documents required for Nidhi Company Registration Online in India

• Following are the documents needed for nidhi company registration process:

• From Directors and Shareholders:

• Photographs of the Directors and Members of the company

• PAN Card of the Members

• Copy of Rental Agreement / EB Card Copy of Registerd Office

• Digital Signature Certificate of the directors

• ID proof of members, such as Aadhar Card or Voter ID etc.

• Address Proof of the Directors

• Director Identification Number or DIN of the Directors.

For Registered Office:

• Rent Agreement or the Sale Deed or the Lease Deed of the Registered Office or,

• Address Proof of the Registered Office;

• NOC (No-Objection Certificate) signed by the owner of the Property.

Documents needed to be drafted by CA or CS:

• AOA (Article of Association) of the Company

• MOA (Memorandum of Association) of the Company

• MCA (Ministry of Corporate Affairs) form attestation.