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Requirements for incorporating Nidhi Company
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Requirement of Equity Capital
At the time of incorporation Nidhi Company must have a paid up equity share capital of Rs. 5 lakhs Net owned fund should be 10 lakhs and ratio of net owned fund to deposit shall not be more than 1:20. However, 10% of the total deposit collected from members must be in a fixed deposit in a nationalized bank.
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Regulated by MCA & RBI
Nidhi Company‘s activities are regulated by MCA and RBI. RBI has exempted the notified Nidhi from core provisions of RBI and other directions are applicable to NBFC. Nidhi Companies are only allowed deposits which are over six months and less than five years old.
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Minimum Number of Members
For Incorporating a Nidhi Company must have at least 3 directors and 7 shareholders. It must have at least accumulated 200 members within a year of its formation, otherwise it has to apply for permission for extension of time limit to collect more members.
Documents Required for Nidhi Company Registration
Following documents are required to be submitted by all directors in self attested form.
- PAN Card
- Driver’s License/ Voter ID/ Aadhar Card/Passport
- Bank Statement/ Telephone Bill/Mobile Bill/ Electricity Bill
- Latest Passport-size Photograph
- Specimen Signature Certificate
- Copy of NOC from the owner of property
- Copy of Sale deed in case of owned property
Features of Nidhi Company
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Borrowing at lower rate
A major advantage of Nidhi Company is that member of Nidhi Company is able to borrow money at cheaper rate as compared to bank lending rates which will be very economical in today’s time.
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Promotes Savings
A Nidhi Company motive is to promote savings and thrift among its members. It encourages borrowing and lending of money among its members as it acts as mutual benefit society.
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Less formalities and obstacles
Borrowing and lending process is much easy as compared to banks because borrowing and lending are made between known members of company where the procedure is fixed. A Nidhi Company encourages members to unlock the potential of their money and borrow money at lower rate of interest.
Procedure for Nidhi Company Registration
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8 Working Days for registration
For registration of Nidhi Company, at least 3 directors should apply for Digital Signature Certificate (DSC). We will file registration as per documents submitted by you in this regard
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14 Working Days for selection of Company’s name
After making application for DSC, our next step would be selection of unique name for your company as per regulations this will take up to a week, depending on whether you have all the documents in order.
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35 Working days for getting incorporation certificate
After getting understanding about your business and submission of your document, we will provide you incorporation certificate in around 35 working days depending upon govt’s approval.