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Are you looking to start a finance/loan business in India?
Get started to day on just RS.3,400/-* onwards
(10-15 days in getting registered)
Apply with us today to get your company registered as Nidhi Company.
– Package Inclusions –
RBI guidelines follow up
No minimum-maximum capital requirements
Get Ready to Start Business in 15 days
Get Introduction to High-Level Software
Simple to raise deposit from Public
Complete guide on How to Register Nidhi Company?
The term Nidhi Company belongs to a kind of NBFC (Non-Banking Financial Corporation) which is managed and administered by the provisions of the Companies Act, 2013. The only important feature that discovers a Nidhi Company from other companies is that this business structure deals with the deposits from and loans to its members, i.e., shareholders only, and it acts for the mutual benefits of its members.
Further, it shall be unique to take into thought that the activities of a Nidhi Company do fall under the ambit of RBI (Reserve Bank of India), as it is the same as that of an NBFC.
Nowadays, Nidhi Company, as a business structure, has come up as a very attractive lending mechanism for obtaining secured loans. These companies are most effective in the Southern Parts of India. Furthermore, the operations and working of Nidhi Bank is similar to Co-operative Society. Further, section 406 of the Companies Act, 2013 and Nidhi Rules prescribed, deals with the method of Nidhi Company Registration.
Moreover, the prime reason behind incorporating a Nidhi company is to inspire and stimulate its members to save, so that they can easily and with ease satisfy their financial needs arising from time to time. Hence, this company is based on the policy of Mutual Benefits.
Benefits of Nidhi Company Registration
Easy formation
Nidhi Bank registration requires only 7 persons out of 3 will be Director in company. Even less documentation to do and simple Registration process takes about 10 to 15 days to get it register. Nidhi company registration is quite simple and the level of complexity as contrasted to other kinds of finance companies like NBFC is least in Nidhi Company
No RBI Regulations – less compliance.
Nidhi Company by its nature of activity occurs under the level of NBFC but does not need RBI approval. These companies follow Nidhi Rules, 2014 announced in respect of the activity and working of the company. RBI has exempted Nidhi Company from pursuing valid compliances so you don’t require to be in a rush as RBI will not worry if you starting a Nidhi Company in India.
More Confidence in Nidhi company
The main objective of Nidhi company is to develop the habit of saving amongst its member that means it is safe and going concern business as the members will not hold savings anytime.
Lesser level of Risk – Non- payment loans
Nidhi Company can accept deposits and give loans to its members only according to the Nidhi Rules, 2014 that means the risk of non- repayment of loans is less as matched to other finance businesses. It is the safest way of giving loan and the loans given to members are at very cheap rates in comparison with other providers which repeatedly bring greater savings amongst members.
Net owned fund- Invest one get twenty
Net owned fund means the amount of capital invested by the owner in its business for raising funds. The net held fund ratio of Nidhi Company is 1:20.
What is included in Package?
Certificate of incorporation
DIN for Directors
Digital Signature for Directors
Name Search &Approval
MOA/AOA
Registration Fees
Company PAN & TAN Card
PF and ESIC registration
Post Registration Compliances
Documents Required for Nidhi Company Registration
- PAN Card details of the Members
- Photographs of the Directors and Members
- Digital Signature Certificate
- Copy of Aadhar Card / Voter ID of the Members
- Address Proof of the Directors
- DIN of the Director, if already allotted
- Rental Agreement of the place being used as Registered Office, or,
- Address Proof of the Registered Office
- NOC signed by owner of the Property
Nidhi Company Registration Process
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Collect all documents |
The first step is to collect all the needed documents as directed above and sent us all in the scan copy to us. No hard copy of documents is required that is no need for paperwork total online processing. |
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Apply for Name approval |
Once you have applied for name approval, the following step is to ask for a company name. The company name requires to be as per Rule 8 of the Company incorporation rules. The approved name is valid for few days. You have to use RUN form for name approval purpose or you can directly approve name of company through Spice+ form with MCA. |
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Apply for DSC |
The next step is to make application for digital signature certificate. The DSC is needed for all the directors/shareholders of the company. DSC is a digital signature used for filling all the forms online. |
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Prepare all requisite documents |
Once the name is supported, the next step is to make all the pending documents for company registration. At this stage, you have prepared MOA, AOA, INC 9, INC 10, DIR 2, etc and shared for signature. |
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File for Incorporation |
Once all the documents are approved by the promoters the next step is to file the company incorporation with Spice Form INC 32. Moreover, the govt fees at this stage have also been declined by the Government. |
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Follow up & approval |
Once you have filed for the company registration, another step is to follow up with the government. If all your documents are precise then the government will give the registration certificate and your company registration is done. |
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Loan & Deposit under Nidhi Company
Nidhi Company is becoming so much familiar with the businessman who needs to begin the finance or loan business. The principal reason behind this fact is the choice of Nidhi Company to accept deposits from the public and to lend money to the public (members) without any RBI approval. Let us convey the brief about the loan and deposit under Nidhi Company or Nidhi Bank.
Loan under Nidhi Company
Nidhi can lend 3 types of loans; gold loan property loan, others (LIC, FD etc.).
Nidhi Bank is not eligible to include microfinance business but can give a secured loan @20% interest.
Nidhi can take legal action if any member failed to repay any sum of money.
Deposits under Nidhi Company
Nidhi can accept deposits such as Fixed deposit (FD), recurring deposit (RD) & Savings.
Online Nidhi Bank registration is eligible to pay interest up to 12.5% on FD & RD and 6% on savings accounts.
Nidhi can make deposits up to 20 times the funds invested in it. For example – Invest Rupees 5 lakh and accept Rupees 1 Crore.
Nidhi Company businesses – What all are allowed
As discussed, Nidhi Company is not permitted to work as microfinance company business or in other words, Nidhi Company is not eligibe to provide unsecured loans to its members. Nidhi Company can only give secured loan that too only to its members. Further, Nidhi companies can advance loan only towards the following securities:
Gold Loan: This is one of the central streams of business for Nidhi Companies. Gold loan by Nidhi Companies are extremely common and are subject to certain rules and regulations as per Nidhi Rules, 2014. Here are the following conditions:
The maximum finance against the GOLD must be up to 80%.
The highest repayment period is 12 months.
The rate of interest shall not exceed 7.5% plus the maximum rate of interest on gold loans.
A Nidhi Company can advance a maximum loan of 200,000 if deposits do not exceed Rs.2 Crore.
Loan against immovable Property: This sort of loan is not very popular with Nidhi Company. But, this is an option by which Nidhi Company can pay loans to that person who does not have the gold with them. The loan is also subjected to some conditions:
The maximum loan can be rupees 200,000 if deposits do not beat Rs.2 Crore.
The repayment period of the loan shall not exceed 60 months.
The highest finance can be up to 50%.
Further, this kind of loan cannot exceed 50% of the total loan amount.
Loan against FDR and Deposits: This kind of loan is also advanced under Nidhi Company. Nidhi can advance loans against FDR and also even upon the deposits kept by it. Further, such kind of loans is also subject to some restrictions or conditions:
The repayment period for this loan can not exceed the period of Fixed Deposit.
The most finance under this case shall be up to the equivalent of Fixed Deposit under Nidhi Company.
Loan Against Government Bonds: Such loans are very rare but Nidhi company registration can advance loans upon these securities as well.
Unsecured loan by Nidhi Company: This type of loan is forbidden by Nidhi Company.
Vehicle Finance by Nidhi Company: This sort of loan is also not allowed under Nidhi Company. Vehicle finance is provided to Non-Banking Financial Companies (NBFC) in India.
QuickBooks- Of the accounting tools for small businesses checked, QuickBooks Online is the best overall. Not only can the vast majority of small business accounting professionals use QuickBooks Online, but there are also a plethora of online training tools and forums where you can get help if you need it.
Zoho Books– Makes it simple to automate the most basic (and, let’s face it, tedious) bookkeeping activities, so you can spend more time on your company and customers and less time on data entry. It allows you to set automatic payment reminders for customers, build recurring expense profiles, and automate inventory tracking, among other things.
Xero-In our study, Xero is the best choice for microbusinesses looking for very basic accounting software. This program has a straightforward user interface and completely integrates with a third-party payroll provider. Via Xero’s integration with Stripe and GoCardless, businesses can accept payments from customers online.
FreshBooks-In comparison to other accounting tools, FreshBooks allows for more invoicing customization. Its primary purpose is to send, receive, print, and pay invoices, but it can also handle simple bookkeeping for a company. Service-based companies may use this accounting program to submit proposals and invoices, request deposits, obtain client retainers, monitor project time, and receive payments.
Compliances after Nidhi Company Registration
3 forms are filing to the compliances of Nidhi Company in India and all the reporting turns around it. Followings are three forms to the Nidhi Company compliances described briefly.
NDH – 1 Filing with ROC
NDH – 1 is an annual statement filed with the ROC in terms of Nidhi Rules. If this form not submitted timely, you need to bear huge penalty.
NDH – 3 Filing with ROC
NDH – 3 is a half annually return filed to examine whether the Nidhi company is working as per the rules or not. This return is to be filed by 30th September and 31st March every year.
Other Compliances
Government has introduced many other compliances which are designated under different act’s like Companies Act, 2013, Income Tax Act, 1962, Money Laundering etc.
Does Nidhi Company require to follow RBI?
Do you know that a Nidhi Company does not need any RBI approval to get an enrolled company in India? Yes, it is true. You can register a Nidhi Company in India without any RBI permission. There is no RBI need for Nidhi Company. Actually, RBI has exempted Nidhi Companies from its core compliance requirements. Therefore, it does not need any RBI license or approval, no rupees 2 crore capital needs, and many more. Hence, Nidhi Company is said to be one of the best ways to begin the finance business in India.
As said, the RBI does not administer the Nidhi Companies rather it is being directed by the central government by Nidhi rules, 2014. Nidhi rules are prescribed whole law governing Nidhi Company compliance and other working requirements. Nidhi Company does not need any other permission from any state authority to work as it is being already permitted by the Central Government in terms of Nidhi Rules, 2014. Nidhi Company Rules, 2014 include almost 24 rules defining the details and information related to loan, deposits, compliance, branches, etc concerning the Nidhi Company.
Hence, if you are looking to begin a Nidhi Company in India, then it is suggested to read all the Nidhi rules, 2014 properly.
7 things to keep in mind before Nidhi Company Registration.
- Nidhi’s are prohibited from issuing any preference shares, debentures, or any other debt instruments. Preference Shares published before the commencement of the Act are, though, permitted to be delivered as per the terms of their issuance.
- Nidhi’s are prohibited from opening any current accounts with its members. The purpose of Nidhi’s is to increase savings and thus they are allowed to only open savings accounts with their members.
- There is an outright restriction on a Nidhi to extend loans. Also, allow deposits to any person who is not its member.
- Nidhi’s cannot carry on any company other than the business of borrowing or lending in its own name.
- Further, Nidhi’s are decreased from accepted any deposits or advancing loans to any persons (including body corporates) other than its member. Guarantee any of the assets ledged by its members as safety, access into any partnership arrangements, pay any brokerage, or incentives for mobilizing deposits from members or for granting loans.
- At present, Nidhi Companies are excluded from the payment of brokerage on deposits and making communications in any manner.
- The only compliance requirement of Reserve Bank of India presently applicable to Nidhi’s concerns to the ceiling on the interest rate payable on the deposits.
Comparison in Nidhi, Micro Finance & Society
Comparisons Chart
|
Basis of Difference |
Nidhi Company |
NBFC Company |
Co-operative society |
|
Minimum Paid-up Capital |
Rs 5 Lakh |
Rs. 5 Crore |
Rs. 100 crore for small finance bank |
|
Number of People needed |
7 |
2 |
10 |
|
Approval of RBI |
Not needed |
Compulsory |
Not applicable |
|
Area of Operation |
District level |
India |
States wise |
|
Time and Cost of Registration |
15 days and Rs 14900 |
3 to 5 Months and Rs 6 to 7 lakhs |
1 to 3 months and Rs 15000 to 20000 |
|
Ownership |
Held by shareholders |
Held by shareholders |
Decided by-elections |
|
Perfect for |
Beginner |
Experienced |
Beginner |
How we Help You to Form Your Nidhi Company in India
Get the help of very qualified team of professionals for offering our services to you. And get very organized professional services in economic budget along with full customer satisfaction. We help in each step of Nidhi company registration so that you can focus on your business. We are giving our leading online CA services to you that too at affordable cost than others. We can offer best services and compliance at the best level to you.
- Top Rated Nidhi Company Professionals
- Compliance Related Support
- Dedicated Chartered Accountants
- Dedicated Company Secretaries
- Experts are available 24*7
- Get Start with your Business in 15 days*.
FAQs
What is Nidhi Company Registration?
Nidhi Company Registration is a finance related company who can accept deposit from its members or lend money to them. Basically it is a finance company giving banking solutions to its members.
How to register Nidhi Company in India?
For registration of Nidhi Company in India, at-least seven members are required out of three can be director. It is also called as Nidhi Bank in India. To register Nidhi Ltd at-least seven persons are required. You need to provide some basic documents of all person.
Is RBI approval required for Nidhi Company Registration?
No, Nidhi Limited registered under Companies Act, 2013 along with Nidhi rules. There is no involvement of Reserve Bank of India.
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