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.
Belonging to the classification of non-banking business firms and identified below Section 406 of the Companies Act, 2013, it is regulated by the central government. The basic business of such a company is to facilitate lending money between the core members of the company. Examples of a Nidhi Company are permanent funds, mutual benefit funds, a mutual benefit company and benefit funds. The main concept behind developing a Nidhi Company is to obtain cash deposit from associates or contribute to them, for the common gain of the two parties. All lending and acquiring must agree with the decree stated in chapter XXIV of Company Rules, 2014.
The financial dealings and all the registration processes of a Nidhi company are regulated by the Ministry of Corporate Affairs. The deposit acceptance activities conducted by the Nidhi Company also come under the scanner of Reserve Bank of India and the latter has the rights to look into the financial dealings. Nidhi companies are only allowed deposits which are over six months and less than five years old.
A Nidhi Company must accumulate 200 members within a year of its formation.If it fails to do so, it needs to apply for permission to extend the time limit to acquire more members. Three of its members will be appointed as directors and there must be seven stockholders on inception.
A Nidhi Company must have an equity share capital of Rs. 5 lakh on inception. This entire amount must be paid-up. Moreover, 10% of the total deposit collected from members must be in a fixed deposit in a nationalised bank.
As a member, one can borrow money at a minimum rate, relative to the rate at which banks lend money.This can be a major advantage in times of need, as different individuals in the mutual benefit society are likely to need funds at different points in time.
It encourages all its members to save money and encourages a thrifty lifestyle. A Nidhi company, after all, is a mutual benefit society wherein members can lend or borrow money and accept financial aid amongst them.
Borrowing and lending to known persons, where the procedure is fixed, is much less complicated than dealing with banks or in an informal setting. A Nidhi Company enables its members to unlock the potential of their money and gain from lower interest rates when they require money themselves.
A minimum of three directors must apply for a DSC, which is necessary to file the Nidhi company registration documents. For this, you will only need to provide a few scanned documents and details; our representatives will fill the form and submit it online.
As soon as we apply for the DSC, we will apply for the company name. and submit the rest of the incorporation documents. Altogether, this will take up to a week, depending on whether you have all the documents in order.
Having a Nidhi registration done is quite simple. It takes 35 business (dependent on government authorisation) days for your incorporation certificate to reach you. So just spill a wee bit about your start-up or business and we’ll have your registration done as quickly as we can. We handle 400 requests in a month just like yours, so hurry!
We make your interaction with government as smooth as is possible by doing all the paperwork for you. We will also give you absolute clarity on the process to set realistic expectations.
Our team of experienced business advisors are a phone call away, should you have any queries about the process. But we'll try to ensure that your doubts are cleared before they even arise.
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