Nidhi Company Registration Process In India

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Nidhi company registration

Nidhi company registration is a company whose main business is dealing in finance activity between its members only without taking prior approval of RBI. They are just like NBFC or banks but they cannot operate their functions with the outsiders, they can lend or borrow money from their members only. It is also a type of public limited company registered with the Ministry of Corporate Affairs (MCA) through the Registrar of Companies (ROC) in whose jurisdiction the registered office of the company is situated. Minimum 7 persons are required to start the company registration process along with a minimum 5 lakhs capital.

There are many conditions that the company must meet after registering, such as a semi-annual return, annual return, holding the Annual General Meeting, annual filing of the ROC, compliance with the membership limit and deposit amount, enrollment in ITR, KYC Director, etc., to file each year, to avoid penalties and other consequences. It has the same functions as other companies with more responsibilities, but once registered, it is valid for life until the closing application is filed with the registrar. There is a certain business restriction for Nidhi companies that cannot operate, and these are the following:

  • Chit fund
  • Hire Purchase Finance
  • Lease Finance
  • Insurance Finance

Other restrictions:

  1. Cannot issue preference share
  2. Has to maintain 200 shareholders within one year of incorporation
  3. Can open only 3 branch offices in a district and if want to open outside the district then regional director’s approval is required.
  4. Cannot acquire shares of any other company
  5. Cannot lend or borrow money from the person who is not a member of the company; etc.

Documents For Nidhi Company Registration:

Directors/ Shareholders

  • PAN
  • Aadhar card
  • Id proof (voter id/ passport/ driving license); anyone
  • Address proof (bank statement/ electricity bill/ mobile bill/ telephone bill); anyone

Registered office address

  • Sale deed or house tax receipt if owned and rent agreement if rented
  • Utility bill (gas bill/ mobile bill/ telephone bill/ electricity bill); anyone
  • NOC of the person whose name is mentioned on the invoice

NOTE: The address proof must not be older than 2 months

Procedure To Register Nidhi Company:

  1. Name Approval: To start the Nidhi company registration process, the first step is to apply the name reservation. If approved by the government, it is valid for 20 days. It is important that the name should be unique and not similar to any existing company or LLP.
  2. Digital Signature: For registering the Nidhi company the directors and shareholders must have DSC before filing the incorporation form. For DSC there is certain verification which the applicant has to make.
  3. Drafting & Signing of Documents: After name approval, there are certain documents that shall be drafted and the same shall be signed by the shareholders as well as directors.
  4. Submission of Final Form: The final step is to file the registration form to the registrar along with all the details or documents for their approval and if all the provided information is true and correct then the registrar will issue a certificate of incorporation along with that they will grant PAN, TAN, and DIN.

Also Read: Compliance For Nidhi Company

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