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22
Mar
17
Nidhi Company can give loans

Nidhi Company has been taken from the Hindi word ‘Nidhi’ means treasure. Nidhi company follow Companies Act, 2013.These companies are mainly formed for savings. Nidhi companies are also called the mutual benefit society.

Nidhi Company creates the habit of thrift and savings amongst its members. Members can receive deposits and they can lend as well for their mutual benefit.These companies are considered as the secured means of investment. In Nidhi company loans can be can be approved and deposits can be accepted between its members.

Provisions of Loan in Nidhi Company

  • There are provisions for loans in the Ordinary Course of Business but the amount of interest on such loan shall be at least the rate of interest prescribed by RBI.
  • In some cases, the guarantee is given by company against the loan taken by its Subsidiary Company from the bank or financial institutions.
  • Approval of certain ministry should be taken Ministry or department of Central Government and/or State Government prior to giving of any loan or guarantee or security.

Loans can be provided to its members.

There are certain limits on which can be provided

  • Two lakh rupees, where the total amount of deposits of such Nidhi from its members is less than Two Crore rupees.
  • Loans can be provided to its members on the basis of some security.
  • Gold, silver and other types of jewellery. There should be the repayment period of one year which should not exceed one year.
  • The Total loan against the immovable property shall not exceed fifty per on the overall date of approval by the board. The repayment period should not exceed 7 years.
  • Receipt of Fixed deposits, National Savings Certificates, other Government Securities and insurance policies.
  • The maturity date of such securities shall not fall beyond the loan period or one year.
  • In the point of provisions of loan in Nidhi Company you use the definition of loan to directors which is not right.

Sometimes loan against fixed deposits, the period of loan shall not exceed the unexpired period of the fixed deposits.

 

03
Feb
17
Why should people Choose Nidhi Company?

Nidhi Company comes from the Hindi word Nidhi which means “fund”. Nidhi companies are registered under Companies Act, 2013.These companies can be called a habit of savings between the members of the company. Company consist of investment structure consists of realigning funds within a growing group of the member who benefits from the returns at fixed duration.

 Nidhi company is similar to NBFC. It refers to any mutual benefit by Ministry of corporate affairs. These companies have been incorporated with the aim of utilizing money in a best possible manner and savings amongst its members, receiving deposits from and lending to its members only for their mutual benefit. Nidhi companies are also called mutual benefit societies because their dealings are restricted only to the members.

Features of a Nidhi company

  • Company’s work is to borrow and lend money. This can only be done between members.
  • Deals are restricted between the members and membership is limited to individuals.
  • The loan can be approved and deposits can be accepted between its members.
  • Entry can into any partnership arrangement in it’s borrowing and lending activities.
  • Companies do not require to conduct any activities related to chit funds, leasing, hire purchase.
  • The company is are highly localized and mostly single office institution.

Benefits of Nidhi Company

  • It is the cheapest and easiest form of NBFC and can be easily formed.
  • It is a Secured means of investment.
  • Lower and middle-class savings are promoted.
  • External involvement or accept deposits are not required.

Requirements to form a Nidhi Company

  • Digital Signature Certificate(DSC) of all the Directors.
  • Director identification Number-DIN of all the Directors.
  • Copy of a PAN card
  • Copy of Id Proof(Aadhar Card, DL, Passport, Voter id)
  • 2 Passport size photograph.
  • Proof registered office address (Electricity Bill, Phone Bills,etc.)
  • Proof registered rented office address(Bills and Rent Agreement with rent receipt).

Registration process of a Nidhi Company?

  • Initial process-DSC and DIN are applied for filing the registration documents and form is filled.
  • Verification and Approval of the Name-Reservation of the company name are done in this process.
  • Prepare appropriate MOA and AOA.
  • Make the application of incorporation.
  • RBI approval is not necessary for the registration.

Term and Conditions in Nidhi Company

  • The company requires a minimum of 3 directors and 7 members including subscribers for incorporation.
  • The company should have at least 200 members or shareholders within a particular time period from its commencement.
  • Net owned funds should be minimum Rs 10 lacs or above.
  • There should not exceed of 20times from its net owned funds.
  • Nidhi company can only issue right shares.
  • Nidhi Company should allow any new preference share anytime.
  • Another company can be acquired by purchase of securities or controls composed of the board of directors other companies.
  • The company cannot pay any brokerage or incentive for mobilizing deposits from members.

According to the government law, Nidhi Company is governed by Nidhi rules.These companies are incorporated under the nature of a limited company. These comply with two rules one under Companies act, 2013 and Nidhi Rules 2014.Nidhi Company provides the benefit of the mutual fund, Permanent fund etc.

16
Jan
17
What is Nidhi Company?

Nidhi companies are the limited companies registered under Companies Act, 2013.. The word “Nidhi” in Nidhi Company comes from a word which means “treasure”. It has been incorporated with the aim of- utilizing money in a best possible manner and savings amongst its members, receiving deposits from and lending to its members only for their mutual benefit. and compliance with the rules as prescribed by Central Government. Nidhi company is similar to NBFC.
They are known as mutual benefit societies because their dealings are restricted only to the members

Benefits of Nidhi Company

  1. It give loans to and accept deposits only from its members. 
  2. These companies does not require to conduct any activities related with chit funds, leasing, hire purchase
  3. It does not require any external involvement or accept deposits or give loans to any other person other than its members.

Why do people register with Nidhi Company?

It is the cheapest and easiest form of NBFC and can be easily formed. It requires minimum seven members including subscribers to incorporate a Nidhi Company. It shall have the word Nidhi Limited as a part of its name. Like for example XYZ Nidhi Limited.

Conditions need to be satisfied for registration of Nidhi Company

  • It should have a minimum net owned funds of Rs 10 lakhs or more.
  1. It should have at least 200 members or shareholders within a period of one year from its commencement.
  2. Deposits should not exceed 20 times from its net owned funds

Documents required

  1. DIN & DSC of Directors.
  2. Proof of registered office address (Electricity Bill or Rent Agreement with rent receipt).

Beware of these points before making a nidhi company-

  1. Do not open any current account with its members
  2. Do not accept deposits from any person other than its members.
21
Sep
16
Surpassing Services for Nidhi Limited Company Registration

Nidhi Companies are also known Mutual Funds Benefits Company, Mutual Funds Benefits Societies or Benefit Funds. It deals with the contribution from and loans to its members only. As such they come under the Non-Banking Financial Companies (NBFC) category.

Nidhi Companies are formed to evolve the habit of savings and being thrifty among its members for mutual benefits.

Nidhi Companies are registered in India as Public Limited Companies and hence they go through a registration procedure. There are certain requirements to meet before a Nidhi Company can be registered.

Essential requirements for registration are:

  • DINs and DSCs of Directors
  • Identity and Address proofs of Directors
  • Memorandum or Articles of Association
  • Address of the proposed Nidhi Company office

Within a period of one year, Nidhi Limited Company must satisfy the following conditions:

  • At least 200 members or shareholders
  • Minimum net owned funds (NOF) of Rs. 10 lakh or more
  • Term deposits must be at least 10% of outstanding deposits
  • Deposits accepted must not exceed 20 times of its NOF

It takes upto 45 days to register a Nidhi Limited Company following the Nidhi Company registration procedure.

There are certain extended scopes of services for Nidhi Company registration. They are as follows:

  • Obtaining DSC with a validity of 2 years
  • Obtaining DIN for Directors
  • Applying and obtaining name of Company
  • Drafting of Incorporation documents including Memorandum and Articles of Association
  • Obtaining Certificate of Incorporation from Ministry of Corporate Affairs
  • Tax registrations such as PAN and TAN of a Company
  • Printed copy of Memorandum and Articles of Association
  • Reply to queries and issues related to Incorporation of Company

 

01
Aug
16
Nidhi Company Formation in India

Nidhi is a Hindi word, which means finance or fund. So, Nidhi Company can be depicted as bank where only its members can deposit money or take loan.   It is kind of mutual benefits society in the form of a company.  Since Nidhi companies are registered as public limited companies; therefore, it has all the features of public limited companies such as limited liability of its members.

The main thrust to register Nidhi Company is to promote the saving habits among its members for their mutual benefits.

Since Nidhi Company is like a public limited company so most of the requirements are same as of public limited company.

So, let’s understand the process and basics requirement to register Nidhi Company in India.

 Requirement to form Nidhi Companies:

  1. Nidhi Company requires at least 3 directors.
  2. There must be at least 7 shareholders at the time of registration of Nidhi Company.
  3. There must be at least Rs 5 lakh paid up equity capital. This is the point where Nidhi Company is distinguished from public limited company.
  4. It must have at least Rs. 10 lakh as its net owned funds.
  5. Nidhi shall have only object in its Memorandum of Association of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.

Documents required to incorporate Nidhi Companies:

Following are the documents required for company incorporation for each director/ shareholder

  1. Self attested PAN card copy.
  2. Four Photographs.
  3. Self attested copy of any one of the Identity Proof like Driving License, Passport, Voter ID & Adhaar Card
  4. Self attested copy of any one of the Address Proof like Bank Pass Book/ Bank Statement, Telephone Landline Bill, Mobile Bill & Electricity Bill
  5. Company Address proof Electricity Bill, Telephone Bill, Mobile Bill & Gas Bill, AND Rent Agreement (if rented) AND NOC for doing Business & for taking Registration.

Registration Process of Nidhi Company:

  1. Apply for DIN & DSC

It is mandatory requirement to have DIN before becoming director in the Nidhi Company. DIN is unique identity number of every director whereas DSC is medium to sign the documents online. It is equivalent to physical signature.

  1. Choose name of the company

The name of the Nidhi Company must be unique which shall not resemble with any other existing company or LLP. Apart from this, every Company incorporated as a “Nidhi” shall have the last words ‘Nidhi Limited’ as part of its name.

  1. Draft MOA and AOA

MOA and AOA are the main documents to incorporate any kinds of company in India. Therefore, these documents are carefully drafted to avoid any hurdle in incorporation process.

  1. File necessary forms with ROC

File the necessary forms with ROC to incorporate Nidhi Company. Once the government is satisfied with all the documents and other requirements, a certificate of Incorporation (COI) is issued to the applicant. COI is the conclusive evidence of company registration

02
Jul
16
How Nidhi Company arrange finance

For entering into the professional world every person wants to register their business just to have a legal existence. Registering your company would give a legal existence to your business or you can say a life of its own.

One of the essential requirements for every company is to have sufficient funds. Without having funds no company can survive for a long time. Similarly registering your business entity as a Nidhi Company would also require funds and now the question arises that from where Nidhi Company arrange such finance? To answer such question first you need to understand what actually the Nidhi Company is?

This article talks about the meaning of Nidhi Company, its requirements, how does it work, how does it arrange finance, what are the criteria’s and usefulness, filing and other statutory requirements with ROC and other relevant topics.

What is Nidhi Company?

Nidhi companies are the limited companies registered under Companies Act, 2013. The word “Nidhi” in Nidhi Company comes from a word which means “treasure”. It refers to any mutual profit society notified by the Central / Union Government as a Nidhi Company.

Basically Nidhi Company means a Company which has been incorporated with the aim of- utilizing money in a best possible manner and savings amongst its members, receiving deposits from and lending to its members only for their mutual benefit. and compliance with the rules as prescribed by Central Government. They are also known as mutual benefit societies because their dealings are restricted only to the members. Nidhi company is similar to NBFC. Around 80% of the Nidhi companies are situated in Tamil Nadu.

The team of Registrationwala helps you to know more about Nidhi Company and provide their best consultancy services regarding the same, which makes the process of incorporation of Nidhi Company much easier. To know more click on www.registrationwala.com.

Statutory Requirements

To incorporate a Nidhi Company there should be minimum 3 directors and 7 shareholders, It shall be a Public Company having minimum paid up equity share capital of Rupees 5 lakh. It shall have the word Nidhi Limited as a part of its name. Like for example XYZ Nidhi Limited. If such requirement is not fulfilled then the same is not possible to incorporate.

The object of the Nidhi company should be only that of lending money, and taking deposits from its members for its mutual benefit only.

How to arrange finance?

Nidhi Company is one of the categories of NBFC’s or in other words, it is the cheapest and easiest form of NBFC as well. Also, it is very easy form to register and does not require much capital. Anybody can register a Nidhi Company with only 5 lakh minimum capital and with minimum of seven members.

Now if we talk about the funds for the Nidhi Company, it can be contributed solely from its members or shareholders or we can say Nidhi Company can arrange finance only through its members or shareholders. They are allowed to borrow from its members and lend to its members only. If you are registering Nidhi Company and you are dealing with public at large then this point might breaks your heart because as per law Nidhi Company can only deal with its members. In other words , it means that it can accept deposit and provide only to its members.

A Nidhi company shall not accept deposits exceeding 20 times of its net owned assets and also fixed deposits shall be accepted for a minimum period of 6 months. Maximum balance in a saving deposit account shall not exceed Rs. 100000/-

In this way, Nidhi Company can arrange finance.

Why to incorporate Nidhi Company?

  1. Nidhi Company is the best vehicle to start your plan.
  2. Though Nidhi Company comes under the category of NBFCs (Non-banking Financial Companies), yet it is exempted from stringent regulatory compliances, which otherwise you have to follow if you start NBFCs
  3. It is beneficial for Nidhi Company to raise money among its members..
  4. Nidhi company can give loan to its members, only if members provide some securities such as Gold, silver, jewellery, properties or any type of financial securities.
  5. Death of any member or shareholder does not effect the continuity of Nidhi company. It goes on forever. The life of the company does not depend upon the life of the members.
  6. A public limited company have a separate identity from its members.

Compliances after incorporation

After incorporation of Nidhi Company it needs to comply the following criteria within one year-

  • Net owned funds should not be less than 10 lakhs.
  • It should not have less than 200 members or shareholders.
  • Net owned funds to deposit ratio ahould not be more than 1:20

Here, *Net owned Funds = Paid up Equity share capital + Free reserves – Accumulated losses – Intangible Assets

The Nidhi -company is not found in many regions of the country because the purpose of Nidhi company is very much less and is to be created for only above said purposes.

Therefore the person who wants to start the company for the above said purpose than only should start a Nidhi company otherwise not.

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