Create MOA suited best for your ideas and goals for Nidhi Finance Registration, from its basic operation to general understanding in one place.
Worth mentioning here that the concept of Nidhi Finance Registration was introduced in the ‘Companies Act 2013’ in 2014. To better comprehend this concept, we can divide the aforesaid question into three parts:
What Is a Memorandum of Association?
In essence, a Memorandum of Association is a set of documented rules, and the objective of a Memorandum of Association is to regulate the company’s external affairs. It is synonymous with the Ministry of External Affairs of any country that deals with outside affairs to gain a better perspective. Further, the Memorandum of Associations also complements the articles of association.
What is Nidhi Finance Registration?
The literal meaning of the Hindi term Nidhi has been treasure/treasury. It has been defined in the Companies Act 2013. As per rule 3 (da) of the Nidhi Rules, 2014. ‘Nidhi Company’ is a Non-Banking Financial Company formed to teach the tendency/habit of saving and depositing money among its members. Only members of the Nidhi company can deposit and lend money.
Outsiders cannot deposit money in the Nidhi company. The objective of the emergence of the concept of Nidhi Company is that less time and money is involved in its formation compared to banks and Microfinance Companies.
You can choose from a variety of company name ideas in the Vakilsearch company name generator for your brand-new, unregistered business.
What is eNidhi Registration?
Any entity, when registered with the Government or Government’s agent, i.e., Registrar, is called a registered entity as it is separate in the eyes of the law.
Essential Features for Incorporation of Nidhi Company
As per the Companies Act 2013, the following are the prerequisites for incorporation of Nidhi Company:
- There should be a minimum of seven members. If there are six members, then Nidhi Finance Registration cannot be formed.
- There should be at least three directors.
- The aforesaid company can be a public company only.
- The minimum paid-up capital that is essential/required is INR 5 lakhs.
- The basic objective of the Nidhi Company, i.e., cultivating the habit of saving, should be enshrined in the Memorandum of Association.
- Minor, trust, and body corporate cannot become members of a Nidhi Company.
- Only the members of a Nidhi Company can become its director.
- Nidhi Company cannot issue preference shares, debentures, and any other type of debt instrument.
However, this is not the end. The provision of Nidhi Company has been made to encourage the aforesaid company’s growth and prevent misuse rather than making it dummy or on papers only. The Nidhi Finance Registration in India is Essential Process.
Conditions After Incorporation
Consequently, after one year of incorporation of Nidhi Company, the following essential conditions should be met by the Nidhi Company:
- The paid-up capital must be increased to INR 10 lakhs.
- After one year from the date of incorporation, the number of members should be increased to 200.
The following items/aspects should be taken into consideration while incorporating the Nidhi Company:
Digital Signature Certificate
For processing the digital signature certificate, the following documents are required:
- Passport size photograph
- E-mail ID and phone number
- Copy of Aadhar Card and PAN.
Reservation of Name
One of the most important aspects of a company is its identity, which people will remember; the name must be chosen with the utmost care; for name reservation, login to the Ministry of Corporate Affairs website. Afterwards, use the ‘SPICEe+’ utility option available on the ‘MCA SERVICES’ tab. Then click on the ‘ New Application ‘ file in SPICEe + Part A.
Then you will have two options to apply for:
Option 1: ‘Submit for name Reservation’: This option is used for Name Reservation
Or
Option2: ‘Proceed for Incorporation’: This option is used for the company’s incorporation.
Important to mention that one can apply for a name reservation by,
- Making a payment of ₹1000/-
- Providing two name suggestions
However, the process of incorporation can only be started if the Central Nidhi Finance Registration Centre, CNRC, approves the name. Nevertheless, if you want to proceed with the incorporation step, you may just provide a name for the reservation. Here, in this case, the fee to be paid would only be of incorporation and stamp duty.
The paramount concern is the name of the company should have ‘Nidhi Limited’ as the suffix. For instance, ‘ABC Nidhi Limited’ or ‘ABC Mutual Benefit Nidhi Limited’. Here ABC is the brand/trade name of the company.
Requirement of Documents
Documents are required to be obtained/prepared under a specified format for incorporation of Nidhi Company:
- Utility Bill (not more than two months old) of the place where the registered office of the company is to be situated along with a No Objection Certificate from the owner.
- Direct Identification Number (DIN) of the first director.
- Identity proof and address proof of directors/subscribers.
- If the director or subscriber has no DIN, then the bank statement or utility bill (showing the complete address of directors/subscriber) for the objective of providing residential proof.
- Interest in the other entity of the directors, if it is.
- All subscribers must also submit a declaration form stating that rules 4, 5, 6, and 10 of the Nidhi Rules, 2014 shall comply.
Form filing and DIN Application
Once the documentation is completed, a director is appointed to control and manage the Nidhi Company, which can be done through DIN (Director Identification Number). The DIN(s) of all the directors, if not available, may be attached when filing the forms. After that, proceed with the filling up details in SPICe+ Part B. All the aforesaid attachments shall be uploaded here.
Once the SPICe+ Part B is submitted, other forms i.e. AGILE-PRO, SPICe+ AoA, and SPICe+ MoA shall be enabled for filling up the details. The INC-9 shall be auto-generated based on the information in SPICe+ Part B. After submission of all the forms successfully, they can be downloaded, and a digital signature certificate can be affixed wherever it is required. After that, the above-mentioned forms can be uploaded in the following sequence-
- SPICe+ Part B
- SPICe+ MoA
- SPICe+ AoA
- AGILE-PRO
- INC-9
Issuance of COI, PAN, and TAN
Once the registry is satisfied with the application, it issues a Certificate of Incorporation. After that, PAN (Permanent Account Number), Tax Deduction, and Collection Account Number (TAN) can be applied for.
After satisfying that all the formalities have been complied with, the aforesaid department shall issue.
- COI (Certificate of Incorporation)
- PAN
- TAN
Registering a Nidhi is almost equivalent to registering any other type of company under the Companies Act; it sure does have its purpose and objectives, making it different from others. MOA plays a vital role in this kind of organisation, as it contains the foundation of the company, its background, capital, object, goals and plans, making MOA a crucial document to be prepared carefully before proceeding with any registration process. To understand more about Nidhi, visit Vakilsearch with experts at your disposal.
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