{"id":1776,"date":"2018-07-09T05:54:30","date_gmt":"2018-07-09T05:54:30","guid":{"rendered":"https:\/\/companyregistrationonline.in\/?p=1776"},"modified":"2025-08-25T07:10:58","modified_gmt":"2025-08-25T07:10:58","slug":"online-nidhi-company-registration-full-guide","status":"publish","type":"post","link":"https:\/\/companyregistrationonline.in\/blog\/online-nidhi-company-registration-full-guide\/","title":{"rendered":"A Complete Guide to Nidhi Company Registration"},"content":{"rendered":"
“Nidhi\u201d is defined as a <\/span><\/span> company that has been incorporated as a Nidhi Company Registration in India<\/a> with the <\/span><\/span>following <\/span><\/span>object<\/span><\/span>ives:<\/span><\/span><\/span><\/span><\/p>\n Nidhi Company Registration, being like the public limited company,<\/span><\/span> needs to comply with two sets of norms, i.e. Public Limited Company as per the Companies Act, 2013, and the Nidhi Rules, 2014. The regulation of the Nidhi company is under<\/span><\/span> the Ministry of Corporate Affairs<\/strong>. In matters related to their acceptance and deposit, the Reserve Bank of India <\/span><\/span>is empowered to direct them. The Central Government issued the Nidhi Rules 2014, in the exercise of powers conferred under Section 406 read with Section 469 of the Companies Act, 2013, which came into force on the 1<\/span><\/span>st<\/span><\/span><\/sup> day of April 2014. The applicability of these rules is explained below: Every <\/span><\/span>Nidhi company or Mutual Benefit Society, under sub-section (1) of Section 620A of the Companies Act, 1956;<\/span><\/span><\/p>\n<\/li>\n Every company, functioning on the lines of a Nidhi company or Mutual Benefit Society, but has either not applied for or has applied for and is awaiting notification to be a Nidhi or Mutual Benefit Society under sub-Section (1) of Section 620A of the Companies Act, 1956; and <\/span><\/span><\/p>\n<\/li>\n Every company incorporated as a Nidhi under the provisions of Section 406 of the Act. <\/span><\/span><\/p>\n<\/li>\n<\/ul>\n The post requirements of Nidhi<\/strong><\/span><\/span> company<\/strong> for the minimum number of members, net owned funds, etc, are provided under Sub-Rule (1) of Rule 5 of the Nidhi Rules, 2014 <\/span><\/span>as follows;<\/span><\/span><\/p>\n A Nidhi company needs to ensure, within a period of one year from the commencement of the Nidhi Rules, <\/span><\/span>that it has:<\/span><\/span><\/p>\n Members not less than 200,<\/span><\/span><\/p>\n<\/li>\n Net Owned Funds of ten lakh rupees or more,<\/span><\/span><\/p>\n<\/li>\n Unencumbered term deposit of not less than 10 percent of the outstanding deposits as specified in rule 14;<\/span><\/span><\/p>\n<\/li>\n The ratio of Net Owned Funds to deposits of not more than 1:20.<\/span><\/span><\/p>\n<\/li>\n<\/ul>\n The following is some brief information about the incorporation of the Nidhi company:<\/p>\n Net owned funds are the aggregate of paid-up equity share capital and free reserves, as reduced by the accumulated losses and intangible assets that appear in the last audited balance sheets. It is important to note <\/span><\/span>that to calculate Net Owned Funds, the amount representing the proceeds of the issue of preference shares shall not be included for calculating Net Owned Funds. <\/span><\/span><\/p>\n Further, <\/span><\/span>Sub-Rule (3) of Rule 5 provides the procedure to be followed in case the members are less than <\/span><\/span>200 or\/and the ratio of Net owned funds to deposits is more than 1:20. It provides that in such cases, the company shall within 30 days from the close of the first financial year, apply to the Regional Director in Form NDH-2, with fees as specified in Companies (Registration Offices and Fees) Rule, 2014 asking for the time extension. The Regional Director, after considering the application, shall pass orders within 30 days of such receipt of application.<\/span><\/span><\/p>\n It is of importance to note that a Nidhi company shall not acce<\/span><\/span>pt deposits which are exceeding 20 times of its Net owned fund as per its last audited financial statement.<\/p>\n Every company declared as a Nidhi or Mutual Benefit Society under section 620A(1) of the Companies Act, 1956 and the companies functioning on the lines of Nidhi company registration<\/a> or mutual benefit society, but either didn’t apply or has applied and awaiting notification, and existing on or before 26th July 2001 and which have accepted deposits over aforesaid limits. The same shall be restored to the prescribed limit by increasing the Net Owned Funds position or by reducing the deposit as guided below:<\/p>\n a) If the ratio of Net Owned Funds to Deposits (as on 31.3.2013) is more than 1:20 but up to 1:35, the date by which the company has to achieve the prescribed ceiling of 1:20 is by 31.03.2015.<\/p>\n b)If the ratio of Net Owned Funds to Deposits (as on 31.3.2013) is more than 1:35 but up to 1:45, the date by which the company has to achieve the prescribed ceiling of 1:20 is by 31.03.2016.<\/p>\n c)If the ratio of Net Owned Funds to Deposits (as on 31.3.2013) is more than 1:45, the date by which the company has to achieve the prescribed ceiling of 1:20 is by 31.03.2017.<\/p>\n Companies falling under the above-mentioned criteria are not allowed to accept fresh deposits or renew existing deposits if such acceptance or renewal leads to a violation of the prescribed ratio. The ratio is applicable to incremental deposits.<\/p>\n The RBI imposes limited regulation on Nidhi companies, owing to their non-dealing of funds of any members other than their members, and these companies follow the Nidhi Rules, 2014, issued by the center.<\/p>\n It must have a minimum paid-up equity share capital of Rs. 5,00,000\/- and should be increased to Rs. 10,00,000 or more within the completion of one year from the date of incorporation of the company,<\/strong> and unencumbered term deposits of not less than ten percent of the outstanding deposits as specified in Rule 14.<\/p>\n The loans given to the members are at a lower rate of interest than the market rate. This brings greater savings to the members. There are essentially three types of loans that are provided by a Nidhi: The major compliances of a Nidhi company are as follows:<\/p>\n\n
\n<\/span><\/span><\/p>\nApplicability of Nidhi Company Rules<\/b><\/h2>\n
\n<\/span><\/span><\/p>\n\n
Post Registration Requirement<\/b><\/h3>\n
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Incorporation of Nidhi Company<\/b><\/h3>\n
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What are Net Owned Funds?<\/b><\/h3>\n
Acceptance of Deposits by Nidhi Company<\/b><\/h3>\n
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\n1. Gold\/Silver loan: The Maximum rate should be 7.5% plus the tax rate given on deposits. e.g. 7.5% + 12.5% = 20%.
\n2. Loan against property: The Maximum rate should be 7.5% plus the maximum rate given on deposits. e.g. 7.5% + 12.5% = 20%
\n3. Other Loans (includes against FD): The Maximum rate should be 7.5% plus the tax rate given on deposits. e.g. 7.5% + 12.5% = 20%<\/p>\nCompliances of a Nidhi Company<\/strong><\/h3>\n