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EANING:
Nidhi Company means a company which has been incorporated as a public company with the
object of-Culvang the habit of thri and savings amongst its members and receiving deposits
from and lending to its members only for their mutual benefit.
OBJECT TO INCORPORATE NIDHI COMPANY:
Nidhi Company is incorporated with following objecves:
To smulate savings among its member
To lend Loans and receive money as deposits for the purpose from only its members.
Since Nidhis come under NBFCs the RBI is empowered to issue direcons to them in maers
relang to their deposit acceptance acvies. However since Nidhis deal with their
shareholdermembers only RBI has exempted such nofied firms from the provisions of the
RBI Act and other direcons applicable to NBFCs.
APPLICABILITY:
The Central Government made ‘Nidhi Rules 2014’ for the purpose of carrying out the objecves
of ‘Nidhi’ companies. These rules shall be applicable to
Every company which had been declared as a Nidhi or Mutual Benefits under Secon
620A1of Companies Act 1956
Every company funconing on the lines of a Nidhi company or Mutual benefit society but
has either not applied for or has applied for and is awaing noficaon to be a Nidhi or Mutual
Benefit Society under Secon 620A1of Companies Act 1956
Every company incorporated as a Nidhi pursuant to the provisions of Secon 406of the
Companies Act 2013.
PRE-REGISTRATION REQUIREMENTS FOR REGISTERING A NIDHI COMPANY :
Minimum Three Directors:
Minimum three Directors are required to incorporate Nidhi Company. All this three director has
to act as members of the company.
Minimum Seven Members:
Nidhi Company can be started with seven members. Out of which 3 are also to be appointed as
directors.
Minimum Capital Requirement:
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Nidhi Company as Public Limited Company Should have Capital of Rs.500000/- Like Public
Limited Company.
No Preference Shares shall be issued.
Object of the Company
The objecve of such a firm would be to imbibe in the members a habit of thri and saving and
the services would only be restricted to its members.
The name of the company must have word as Nidhi Limited at the end.
PROCEDURE FOR INCORPORATION OF NIDHI COMPANY :
Get Digital Signature Cerficate DSC of all seven members.
Get Director Idenficaon number DIN of three Directors by using DSC.
Suggest at least Six Company name. We will do search for name availability.
Apply to ROC for name approval with adding word Nidhi Limited. Once name is approved by
ROC File Incorporaon document with ROC like MOA AOA Consent of
Director Affidavit and declaraon from directors etc.
Once Incorporaon form is approved by ROC ROC shall issue Cerficate of Incorporaon with PAN
and TAN No.
Requirement to Apply for DSC:
All 7 members should have DSC
Pan Card Self Aested
Residenal Proof Self Aested
Dully fill and sign DSC applicaon form.
Requirement to Apply for DIN:
Minimum Three Directors are required for Incorporaon of Nidhi Company
Photograph of the Applicant – To be Self-aested.
PA N – To be Self-aested Mobile No. Email id.
Educaonal Qualificaon
Occupaon
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Proof of residence of applicant
Address proofs like passport elecon voter identy card raon card driving licence
electricity bill telephone bill or bank account statement shall be aached and should be in
the name of applicant shall not be later than 2 months.
DSC of Individual.
Requirement to Apply for Name Availability:
Six Proposed name with significance of Name
Authorized Capital- Minimum 5 Lacs
Jurisdicon of Registrar of Companies.
Main Object to be pursued by Company
Requirement to Apply for Incorporaon of Nidhi Company:
Registered office address of Company.
Recent Address proof with NOC from Owner.
Consent from all Directors
Affidavit and declaraon from all directors and subscribers.
TIME PERIOD:
Time Required for Incorporaon of Nidhi Company Shall be 20-30 days depending on
government approval.
POST-REGISTRATION REQUIREMENTS FOR A NIDHI COMPANY :
There are certain Compliances which Nidhi Company has to do aer incorporaon of Nidhi
Company. Every Nidhi Company shall within a period of one year from Incorporaon of the
company ensure that it has
Not Less than 200 Members:
Aer incorporaon a Nidhi company must add at least 200 members to comply with this
requirement of law. Further it has to maintain this during the course of me. If the total
members falls less than 200 at any me thereaer it will leave the company at default. However
if the company is not able to reach the limit of 200 members then you must apply for me
within 30 days of closure of financial year in Form NDH-2 with Regional Director.
Net Owned Fund:
Net owned funds shall be Rs.1000000/- or more ‘Net owned funds’ means the aggregate of
paid up equity share capital and free reserved as reduced by the accumulated and intangible
assets appearing in the last audited balance sheet.
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Ratio:
Ratio of net owned funds to deposit shall be not more than 1:20. This ratio is very easy to
understand. Suppose if you have net owned funds of 10 lakh then your total deposit limit
would be INR 2 Crore.
Deposit:
Unencumbered term deposits of not less than 10 of the outstanding deposits as specified in
Rule 14.
Members restricon:
A Nidhi Company shall not admit a body corporate or trust as a member. A minor shall not be
admied as a member of Nidhi Company. But deposits may be accepted in the name of a minor
if they are made by the natural or legal guardian who is a member of Nidhi
GENERAL RESTRICTIONS:
Rule 6 provides general restricons.
Carry on the business of
Chit Fund
Hire Purchase Finance
Leasing Finance
Insurance or Acquision of Securies issued by anybody corporate
Issue
Preference Shares
Debentures or
Any Other Debt Instrument by any name or in any form whatsoever
Open any Current Account with its members
Acquire another company by
Purchase of securies or
Control the composion of the Board of Directors of any other company in any manner
whatsoever or
Enter into any arrangement for the change of its management unless it has passed a
special resoluon in its general meeng and also obtained the previous approval of the
Regional Director having jurisdicon over Nidhi
Carry on any business other than the business of borrowing or lending in its own name
Accept Deposits from or lend to any person other than its members
Pledge any of the assets lodged by its members as security
Take Deposits from or lend money to anybody corporate
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Enter into any Partnership Arrangement in its borrowing or lending acvies
Issue or cause to be issued any adversement in any form for solicing deposit
Pay any brokerage or incenve for mobilizing deposits from members or for deployment of
funds or the granng loans.
Share capital allotment:
Every Nidhi shall allot
To each deposit holder at least a minimum of 10 equity shares or shares equivalent to
Rs.100/-.
To each savings account holder and a recurring deposit account holder at least 10 equity
shares of Rs.10/-.
Acceptance of deposits:
A Nidhi shall not accept deposits exceeding 20 mes of its Net Owned Assets as per last
audited financial statements.
The fixed deposits shall be accepted for a minimum period of 6 months and a maximum
period of 60 months.
Recurring deposits shall be accepted for a minimum period of 12 months and a maximum
period of 60 months.
In case of recurring deposits relang to mortgage loans the maximum period of recurring
deposits shall correspond to the repayment period of such loans granted by Nidhi.
The maximum balance in a savings deposit account at any given me qualifying for interest
shall not exceed Rs.100000/- and the interest shall not exceed 2 above the rate of
interest payable to savings bank account by naonalized banks.
Interest for fixed and recurring deposits shall be at a rate not exceeding the maximum rate
of interest prescribed by RBI which the NBFC can pay on their public deposits.
Every Nidhi shall invest and connue to keep invested in unencumbered term deposits with a
scheduled commercial bank or post office deposits in its own name an amount which shall not
be less than 10 of the deposits outstanding at the close of the business on the last working
day of the second preceding month.
In case of unforeseen commitments temporary withdrawal may be permied with the prior
approval of the Regional Director for the purpose of repayment to depositors subject to such
condions and me limit which may be specified by the Regional Director to ensure restoraon of
the prescribed limit of 10
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