Imagine you are the founder of a group where you are encouraging the members to save. How will the group of members work? Well, to keep focusing on the savings between the members, the government of India introduced a business structure. Yes, we are talking about Nidhi company registration. It is a non-banking financing entity governed by Section 406 of the Companies Act, 2013.

The motive of introducing the Nidhi company is to allow the members to borrow and lend money. The Nidhi registration can be an approachable step if your intention is only to work for savings. This comprehensive guide will explore how you can form a Nidhi company in India, including end-to-end.

Register Nidhi Company for your Business

India is the foundation of businesses, where entrepreneurs are engaged in various sectors. With the increase in entrepreneurship, the government is also offering accessible business types. Nidhi Company is also a company that is further recognized as a non-banking financial company (NBFC). Under the Companies Act, 2013, it was introduced to cultivate the habit of savings and thrift among its members. However, the members are only allowed to lend and borrow money in a Nidhi firm. The members of such a firm further act as the shareholders. 

Also Read: Save Hours with These 6 Nidhi Registration Tips

What are the primary characteristics of a Nidhi Firm?

A Nidhi firm in India operates under the jurisdiction of the Ministry of Corporate Affairs. Here is more detail:

  • Membership-based: The members of a Nidhi company, who also act as shareholders, oversee the entire operation of the company.
  • Savings and Lending: The main objective is to foster the habit of saving and thrift among its members. As a member of the Nidhi company, they can borrow money as a loan and receive financial support when needed. 
  • Mutual Benefit: A Nidhi company works on the mutual benefit principle. This principle determines that the members can pool their resources and share the benefits of savings and lending. 
  • NBFC: It serves as a non-banking financial company, but they don’t need to take a license from the Reserve Bank of India (RBI).This indicates that the Reserve Bank of India does not have any rights over such a non-banking financial entity.
  • Public Limited Company: These non-banking financial companies are registered as a public limited company. Furthermore, for Nidhi company formation, the name of the business must end with “Nidhi Limited.” 
  • Regulatory Structure: Under the Companies Act, 2013, a non-banking financial company is governed by the Nidhi Rules, 2014.

How does a registered Nidhi Company operate?

DepositsA Nidhi company is permitted to accept funds solely from its members. They collect the amount in the form of fixed deposits, savings accounts, and recurring deposits. 
LoansThe members can borrow money as a loan for multiple purposes, like for property, purchasing gold, or other requirements.
Fund ManagementA non-banking financial company collects funds from deposits. The collected funds were later used to provide members with loans. Typically, the funds are utilized for investments in government securities.
Limited LiabilityIf the company suffers from a sudden financial loss or debts, the personal assets of members won’t be affected. 

Also Read: Step Into the Finance Sector with Nidhi Company Registration

Nidhi Limited Registration Online in India

The Nidhi company formation involves several steps. Here is the process with compliance management:

Step 1: Name Approval

Select a distinct name for your company and a name ending with “Nidhi Limited.” Register the name on the MCA portal for its approval.

Step 2: DSC and DIN

All designated directors are required to obtain the Digital Signature Certificate (DSC) and Director Identification Number (DIN).

Step 3: MoA and AoA

To outline the company’s aims and objectives, prepare a memorandum of association and articles of association. Both are required during online Nidhi company registration.

Step 4: Incorporation Forms

Submit the necessary documents, including the MoA and AoA, along with SPICe+ and proof of identity with address.

Step 5:  PAN and TAN

PAN and TAN will be allotted to you with a certificate of incorporation. 

Step 6: Bank Account

After the incorporation of the company, establish a business bank account.

Professional Expertise for End-to-End Compliance Free

The online Nidhi company registration is not the last step. Even after the company registration, you need to follow the compliance. However, the compliance can feel daunting for the startups. In this situation, the expertise of professionals works excellently. Appoint a consultant or get in touch with a professional who provides legal services. The professionals will help you with the company registration process and further ensure compliance. The end-to-end service of legal experts includes name reservation, document preparation, form filing, and much more. 

The professional’s expertise will prepare you for the ongoing compliance requirements and further help to address any issues that may arise during registration. 

Final Thoughts | Nidhi Company Rules for Registration

In essence, adhering to ongoing compliance can be complex for many. But the help of a professional or a legal expert can significantly simplify the process. They ensure the compliance requirement so that you can focus on growing your Nidhi company. Register your firm now as a Nidhi company.

Frequently Asked Questions

1. How can I establish a Nidhi company in India?

Ans. Before the Nidhi company formation, it is first required to incorporate it as a public limited company.

2. How much investment is required to register a Nidhi company?

Ans. The total cost for Nidhi company registration is Rs 19,799, which includes all applicable taxes and fees. 

3. Is RBI approval required for Nidhi registration?

Ans. No, there is no need to take approval from the Reserve Bank of India. 

4. For a 2 crore deposit, how much loan does the Nidhi company provide?

Ans. For the less than 2 crore deposit, only a 2 lakh loan will be granted.

5. Is GST required for Nidhi companies?

Ans. No, there is no need for GST registration for a non-banking financial company.