A Nidhi company is a type of non-banking finance company (NBFC) that is registered under the Companies Act, 2013 and regulated by the Reserve Bank of India (RBI). The main business activity of a Nidhi company is to lend and borrow money among its members, who are individuals or companies that have a common bond.
A Nidhi company is a type of non-banking finance company (NBFC) that is registered under the Companies Act, 2013 and regulated by the Reserve Bank of India (RBI). The main business activity of a Nidhi company is to lend and borrow money among its members, who are individuals or companies that have a common bond.
To register a Nidhi company, you will need to follow the steps outlined below:
Choose a unique and appropriate name for your company. The name must contain the word “Nidhi” and must be approved by the Ministry of Corporate Affairs (MCA).
Obtain Digital Signature Certificates (DSCs) for the directors and shareholders of the company.
Obtain a Director Identification Number (DIN) for each director of the company.
File the INC-29 form with the MCA to reserve the company name.
Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) of the company.
File the INC-7 form with the MCA to obtain the Certificate of Incorporation.
Obtain the Tax Deduction and Collection Account Number (TAN) and the Permanent Account Number (PAN) for the company.
Register for Goods and Services Tax (GST) if applicable.
Obtain any required licenses or permits from the relevant authorities.
Comply with the ongoing compliance requirements of the MCA and the RBI.
It is important to note that the process for registering a Nidhi company may vary depending on the specific requirements of the MCA and the RBI. It is advisable to seek the assistance of a professional, such as a company secretary or a chartered accountant, to ensure that the registration process is completed correctly.
As a non-banking finance company (NBFC), a Nidhi company is regulated by the Reserve Bank of India (RBI) and must comply with certain guidelines and restrictions. Some of the prohibition activities for a Nidhi company are as follows:
Nidhi companies are not allowed to accept deposits from the public or offer any products or services that are similar to those offered by banks.
Nidhi companies cannot issue or deal in any type of securities, such as debentures, bonds, or shares, except for the share capital issued to its members.
Nidhi companies cannot engage in any speculative activities or invest in real estate or constructions.
Nidhi companies are not allowed to lend to companies or firms in which the directors or shareholders of the Nidhi company have a substantial interest.
Nidhi companies cannot offer any overdraft facilities or issue letters of credit.
Nidhi companies must maintain a minimum Net Owned Fund (NOF) of INR 5 lakhs at all times and cannot lend more than 20 times the NOF to any single borrower.
Nidhi companies must follow the RBI’s guidelines on lending and borrowing practices, including maintaining a debt-equity ratio of not more than 1:1.
It is important for a Nidhi company to adhere to these prohibition activities to ensure compliance with the RBI’s regulations and avoid any legal consequences.
The following documents are typically required for Nidhi company registration:
Digital Signature Certificates (DSCs) of the directors and shareholders of the company.
Director Identification Numbers (DINs) of the directors of the company.
Memorandum of Association (MOA) and Articles of Association (AOA) of the company.
Incorporation documents, including the INC-7 form and the Certificate of Incorporation.
Tax Deduction and Collection Account Number (TAN) and Permanent Account Number (PAN) of the company.
Any required licenses or permits from the relevant authorities.
It is important to note that the specific documents required for Nidhi company registration may vary depending on the specific requirements of the Ministry of Corporate Affairs (MCA) and the Reserve Bank of India (RBI). It is advisable to seek the assistance of a professional, such as a company secretary or a chartered accountant, to ensure that all necessary documents are obtained and the registration process is completed correctly.