It's ideal for those businesses looking to start a permanent and a mutual benefit fund, or a mutual benefit company.
The directors must be registered with the MCA
Deciding on a company name and registering it
Principle approval from RBI
It is a company classified as an NBFC (a Non-banking financing company) and registered under Section 406 of Companies Act, 2013. The main business of such a company is to facilitate lending money between the core members of the company. This way members (or shareholders) are encouraged to save money and invest them within the company. These deposits are then used by the company for its members (or shareholders), to provide loans or advances, and to acquire government-issued stocks/bonds/debentures/securities. It is regulated by the Ministry of Corporate Affairs, while the RBI monitors all its financial dealings.
A Nidhi company cannot deal in the following –
Contrary to what you might think, registering a Nidhi Company is a simple 3-Step process and can be done completely online. We’ve laid it out below.
To Be Submitted By All Directors
How can I expand the operations of my Nidhi Company to different areas?
A minimum of three branches can be opened in a particular district. In case you want to expand outside the district or want to open more than three branches, the Registrar of Companies need to intimated 30 days prior to their opening.
Should I dissolve my Nidhi Company because it has not gained the necessary numbers of representatives in spite of completing one full year of tenure?
The conditions laid down by the Act says that a Nidhi Company should acquire a minimum of 200 members within its first year of incorporation. However, in case the company is not able to meet the required numbers, it can apply for an extension with the necessary government authorities.
In a Nidhi Company, are members allowed to credit or debit cash to the general fund?
No, members are only allowed to deposit, borrow, or lend funds.
What are the criteria to become a representative of a Nidhi Company?
Any person can deposit, lend or borrow money through the provisions provided by the Companies Act, 2013. Hence, they can all become members of a Nidhi Company. provided they are not a corporation or a company.
In a Nidhi Company, what should the limit for cash deposit be, for its representatives?
A Nidhi Company can accept deposits not exceeding 20 times of its net owned assets, as per the last audited statements.
We provide access to reliable professionals and coordinate with them to fulfill all your legal requirements. You can also track the progress on our online platform, at all times.
By handling all the paperwork, we ensure a seamless interactive process with the government. We provide clarity on the incorporation process to set realistic expectations.
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To protect the interest of investors, the Ministry has advised them to verify a Nidhi Company status before pumping in money. They can verify it from the notification in the official gazette.
To enhance transparency and investor-friendliness, Nidhi companies are now instructed to follow the time frame for applying in Form NDH-4. In case of non-compliance, a Nidhi Company will not be allowed to file Form No SH-7 and Form PAS-3