Nidhi Company Registration.
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What is a Nidhi Company Registration?
Nidhi Company is a type of Non Banking Financial Institution (popularly known as NBFC) which facilitates the easy fund availability for its members. Nidhi Company is allowed to take deposits from its members and it can lend money to its members only. Also, Nidhi Company is not required to take any license from RBI to conduct its business. Thus, its the perfect way to start your lending business in India. Incorporation of a Nidhi Company comes under the provisions of Companies Act, 2013
Basics of Nidhi Company
Before we explain the process of registration, you must understand the basic of Nidhi Company
• Nidhi Company is also known as Mutual Benefit Company. It promotes the skill of saving and effective utilization of funds within its members.
• Anybody can register a Nidhi Company in India; as there are fewer compliances and legal formality that needs to be taken care of.
• Apart from its members, A Nidhi Company cannot deal with anybody else who is not a member of the company.
• The minimum capital requirement for Nidhi Company is five Lacs with at least seven members needed to incorporate a company.
Restrictions on Nidhi Company
Registering a Nidhi company is not an easy task, it holds some kind of restrictions which all the members or the shareholders have to follow it. Generally, a Nidhi company is prohibited from undertaking any of the following activities:
- A Nidhi company should not undertake the business of chit fund, leasing finance, hire purchase, acquisition of securities or insurance.
- A Nidhi Company should not issue preference shares or debentures.
- A Nidhi Company should not open current account for any member of the company.
- A Nidhi Company should not accept deposit or lend money to any non-member or person who is not a member of this company
- A Nidhi Company are not allowed to issue any kind of advertisement.
- A Nidhi Company should not enter into any pay brokerage or agreement to woo any kind of deposits.
- The members of the company are not allowed to pledge any of the assets which is submitted as their security.
Nidhi Company Registration
Section 406 of the Companies Act of 2013 and the Companies (Nidhi Companies) Rules of 2014 is comprising of all the provisions which are in relation to the “incorporation and governance of the Nidhi Companies in India”. The guidelines and directives for the Nidhi Companies are also issued by the RBI. These are mainly related to financial activities and investments by companies including the NBFCs. Because of “Nidhi Companies” being engaged in the business of deposits and loans by it’s members only, certain exemptions have been provided to these companies, by the RBI.
Producer Company Registration
To register a Producer Company in India, the following members in any of the combination is necessary:
- Ten or more individuals, each of them being a producer.
- Two or more producer institutions.
- A combination of ten or more individuals and producer institutions
What documents required for a Nidhi Company Registration?
From All Directors And Shareholder
The registration process for a Producer Company is then similar to that of a Private Limited Company. DSC and name approval must first be obtained. The name of a producer company must end with the words “Producer Limited Company”. Once, name approval is secured from the MCA, application for incorporation can be filed for incorporating the Producer Company.
If the Registrar is satisfied with the application for incorporation of Producer Company, then he/she will approve the same and issue Certificate of Incorporation. Once, a producer company is incorporated, it shall function similar to a private limited company subject to certain provisions. However, unlike a Private Limited Company, a Producer Company does not have a limit on the number of members.
Within a period of one year from the commencement, the Nidhi Company must meet all of the following criteria:
- Not have less than two hundred members (shareholders).
- Have Net Owned Funds (NOF) of ten lakh rupees or more.
- Have unencumbered term deposits of not less than ten per cent of the outstanding deposits.
- Have a ratio of Net Owned Funds to deposits of not more than 1:20.
“Net Owned Funds” means the aggregate of paid up equity share capital and free reserves as reduced by accumulated losses and intangible assets appearing in the last audited balance sheet.
In the case at the end one year from commencement the Nidhi Company is not able to meet the above requirement, the Company may within thirty days from the close of the first financial year, apply to the Regional Director in Form NDH-2 for extension of time.
If even after the second financial year the Nidhi Company is not able to meet the requirements for a Nidhi Company, then the Nidhi Company shall not accept any further deposits from the commencement of the second financial year till it complies with the provisions for operating as a Nidhi Company and be liable for penal consequences.
Basic
- 2 Digital Signature 1
- 2 DPIN
- LLP Deed Drafting
- Incorporation Fees
- 1 Lakh Capital
- PAN & TAN
- Certificate of Incorporation
Standard
- 2 Digital Signature 1
- 2 DPIN
- LLP Deed Drafting
- Incorporation Fees
- 1 Lakh Capital
- PAN & TAN
- Certificate of Incorporation
- ISO Certificate 2
- MSME Certificate
- GST Registration
- GST Invoice Software 3
Premium
- 2 Digital Signature 1
- 2 DPIN
- LLP Deed Drafting
- Incorporation Fees
- 1 Lakh Capital
- PAN & TAN
- Certificate of Incorporation
- ISO Certificate 2
- MSME Certificate
- GST Registration
- GST Invoice Software 4
- Website Design 5
- Trademark Registration
- Logo & Letterhead