Nidhi Companyis a type of company which accepts deposits and lends money to its members only. Under this, profit earned by members of the Nidhi Companyis shared among themselves. Nidhi Companycan only be registered as a public limited company. It falls under the purview of Non-Bank Financial Institution or an NBFC. The main object of the Nidhi Companyis cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit. In this blog post, we will talk about the rules regarding Nidhi Companyregistration. Within one year of its incorporation, when the number of shareholder reached 200 then a separate application is filed before the ROC grant of Nidhi Company Status.
A Nidhi Company can be registered in India, by 7 members. A Nidhi Company Status it need at least 200 members in a year.
Activities like Chit Fund, Hire-Purchase Finance, Leasing Finance, Insurance or Securities Business is strictly prohibited.
It starts with 7 members as a public limited company, however, to obtain a Nidhi Company Status needs to the minimum number of shareholders must be 200 at the end of the 1st year.
The minimum paid-up equity capital required for Nidhi CompanyStatus is Rs. 10,00,000 help by at least 200 members.
The Proposed name of the Name of Nidhi Companymust be unique and it should not be similar. The name can be reserved through Reserve Unique Name (RUN) facility.
The documentation play an important role in incorporation of company, it must be recent and eligible
Digital signature (DSC) is a basic requirement to initiate the Nidhi Company Registration procedure as all the forms are submitted should be self-attested
The name of Nidhi Company must end with “Nidhi Limited” and must be unique and should not be the same or similar to an existing company.
Once the name is approved the Nidhi Company Registration application is submitted in SPICe Form along with Nidhi company’s Articles of Association and Memorandum of Association. After proper inspection of the application, COI is issued.
The application for Nidhi Status is filed when the net worth of the company is over Rs. 10,00,000 and the minimum no. of members are 200.
Ans 1. No, unlike other NBFCs, Nidhi Company Registration and regulation is exempted from core provisions of Reserve Bank of India.
Ans. 2 Nidhi Company Registration, as well as regulation, is done by the Ministry of Corporate Affairs. All the activities are done as per the provisions of Nidhi Rules, 2014.
Ans. 3 As Nidhi Companies are not regulated by RBI, in order to ensure smooth and transparent operations of Nidhi Company central government has introduced Nidhi Rules, 2014. These rules contain the governing principles for Nidhi company operations.
Ans. 4 After Nidhi Company registration the most important part is to know that you can only accept deposits from your registered members.
Ans. 5 In order to become a member of a Nidhi company following requirements are to be met:
1. Member must be an individual, no corporate body or trust can become a member.
2. The member must have attained the age of 18 years.
Ans. 6 NO, RBI approval is not required for them. Business can be started as soon as Nidhi Company Registration process is completed.
Ans. 7 NO, Nidhi companies cannot issue following securities;
1. Preference shares
3. Any other kind of Debt security
Ans. 8 For Nidhi Company loan limit is dependent upon the amount of deposits it holds. Following are specified limits:
|Deposit amount (in Rupees)||Loan Limit (in Rupees)|
|Less than 2 Crore||2,00,000|
|More than 50 Crore||15,00,000|
>Ans. 9 Â No, Nidhi Company cannot operate outside the state it is registered in.
Ans. 10 No, Nidhi company is neither authorized to acquire through the purchase of its securities nor does it has the power to control its management or change the composition of its management.
For any such activity previous approval from the respective Regional Director is required to be obtained after passing a special resolution in its general meeting.