Nidhi Company Registration
Nidhi company is an exempt non-banking financial company (NBFC). As such, they accept deposits from the public while also acting as a platform for lending among their members. Nidhi companies require directors to obtain class 2 digital signature certificates; this step may be skipped for directors who already possess DINs.
Benefits of Nidhi Company Registration
1. Cost-Effectiveness
Registration of a Nidhi Company can be a great choice for those who wish to start businesses with minimal capital requirements. This entity, also known as a mutual benefit society, exists primarily as an avenue for savings among its members while offering lending facilities; they may also acquire government shares, bonds, debentures and securities from government sources. Unlike other NBFCs, however, Nidhis are prohibited from accepting deposits from non-members or engaging in activities outside their primary mission.
Starting a Nidhi Company begins by applying for name approval with the Ministry of Corporate Affairs (MCA). Once approved, you may file for DINs (Director Identification Numbers) and DSCs (Digital Signature Certificates). Subsequently, filing necessary documents with ROC involves memoranda of association and articles of association drafted under MCA rules; once verified by ROC, they issue certificates of incorporation that contain your CIN as the unique identifier of your company.
Once you’ve obtained a certificate of incorporation, the next step should be obtaining your PAN and TAN (Tax Account Number). These documents allow bank accounts to open for your company and start operating once all three numbers have been acquired.
An additional way to enhance the cost-efficiency of your Nidhi Company is conducting a detailed cost management analysis. This will allow you to identify any unnecessary expenses and implement changes to lower them; this route will increase profits while meeting its primary goal – instilling savings habits among its members.
Once your Nidhi Company is up and running, its performance must be regularly assessed. Doing this will ensure it complies with regulatory requirements while upholding high-performance levels. Monitoring also allows you to take corrective actions before any problems arise – one easy way is using software programs that track key metrics of your business.
2. Limited Capital Requirement
Nidhi Company is a Non-Banking Financial Company that can accept deposits and borrow funds only from its members and issue debt securities such as preference shares or debentures to these members. Furthermore, this entity can purchase government-issued stocks, bonds or debentures.
Nidhi Companies are relatively straightforward; Registration can usually be completed within one month. The process involves registering the name, filing Articles of Association and Memorandum of Association documents with relevant authorities, paying registration fees and receiving approval of documents within 15-20 days – this certificate contains their Company Identification Number (CIN).
Once a Nidhi Company is registered, it can begin taking term deposits – although total deposits should not exceed 20 times its net owned fund. It must also submit copies of its PAN, TAN, and Certificate of Incorporation documents to a bank to open current accounts with them.
Before applying for Nidhi Company registration, directors must obtain DINs. Once this step has been taken, bank account applications can be submitted to the Ministry of Corporate Affairs for review and, once accepted, will result in PAN/TAN being issued within a week and can begin operating current bank accounts and opening business bank accounts.
Nidhi Company registration can be an effortless, affordable experience if handled by a professional agency like Kanukkapillai. They make the process straightforward by expediting all necessary documents, including KYC details from company directors, which the MCA verifies; digital signature verification from directors; then proofs of address and residence that will need to be presented before filing with the ROC within 180 days after incorporation for approval to commence business operations – Kanukkapillai makes this all simple and affordable!
3. Perpetual Succession
Nidhi Company registration in India is an easy and straightforward process as an NBFC (Non-Banking Financial Company). Approved under Section 406 of the Companies Act 2013, their purpose is to promote thrift and savings among their members and lending facilities. They are managed by their shareholders, with supervision provided by the Ministry of Corporate Affairs.
The initial capital requirement for Nidhi companies is Rs 5 lakhs, and paid-up share capital can be increased after incorporation. Once registration is complete, they can open current bank accounts, but first, they must secure PAN and TAN numbers and submit Income Tax returns annually.
Nidhi Companies are independent legal entities with perpetual succession features, meaning the company will still exist even if one of its directors or shareholders dies; this benefit does not apply in sole proprietorship or partnership cases.
Once a Nidhi Company completes all registration procedures, it will receive its Certificate of Incorporation and can apply for PAN and TAN from the Income Tax Department. With PAN/TAN in hand, business activities can begin immediately.
Nidhi Company must also fulfil additional requirements, such as adhering to its core objectives and not accepting deposits from non-members.
Nidhi Companies must file its Statutory Compliance Report in Form NDH 1 within 90 days from the end of their first financial year after incorporation and within 30 days from starting their second financial year. Furthermore, half-yearly returns must be filed using Form NDH 3 and pay any applicable fee prescribed under the Companies (Registration Offices and Fee) Rules 2014.
To form a Nidhi Company, one needs at least seven members, with three designated directors. Furthermore, its name must be submitted for approval via MCA’s online portal and MOA and AOA documents for consideration by MCA.
4. Easy to Incorporate
Nidhi companies are an incorporated type of mutual benefit society that encourages people to save and build savings habits. Members deposit funds with them, which are then used for loans or advances and investing in government stocks, bonds, debentures or securities issued by the government. India’s Ministry of Corporate Affairs oversees them, while the Reserve Bank of India (RBI) monitors all financial dealings with members.
Nidhi Company Registration is an easy process that can be completed online. To begin the registration process, choose an original and distinguishable name for your business that does not sound similar to any existing or competing businesses or names. After your name is approved, draft both the Memorandum of Association (MOA) and Articles of Association (AOA), ensuring they reflect its purpose and goals.
Once your documents are completed, they should be submitted for approval to MCA. Once approved, you will be given a certificate of incorporation containing your company’s CIN and PAN numbers and its Taxpayer Account Number from the Income Tax Department. Additionally, an Individual Tax Identification Number or TAN will also be necessary.
To obtain a Taxpayer Account Number (TAN), complete Form NDH 2. When filling out this form, be prepared to provide:
After submitting your application, the ROC will review it and approve it. At that point, you must open a bank account under the name of your new company and file for GST registration, which is mandatory for businesses that exceed certain thresholds in earnings.
Nidhi companies must have at least 200 members within a year of being established and possess at least Rs 10 lakh in net-owned funds, allocating 10% as unencumbered term deposits. Furthermore, they must comply with other rules and regulations set by RBI.
When registering a Nidhi Company, the Directors must possess the qualifications and experience to manage and control it effectively. Furthermore, these Directors must possess legal authority over its management/control and no criminal or civil convictions that prohibit them from doing their jobs properly.
Process of Nidhi Company Registration Online
Nidhi Company Registration Online is a form of Non-Banking Financial Institution (NBFI) that facilitates savings among its members while offering loans and providing financing solutions. Nidhis are exempted from most regulations imposed by RBI and have easy incorporation processes for easy incorporation.
To register a Nidhi Company, the directors must present several documents, including those listed below.
1. Digital Signature Certificate (DSC)
Nidhi Company Registration Online requires numerous essential requirements, including digital signature certificates issued by the Registrar of Companies (ROC). Proposed directors must self-attest them before applying for DIN (Director Identification Number). Once done, the ROC will review details regarding directors before issuing certificates of incorporation.
DSC stands for Digital Signature Certificate. It can authenticate and sign documents digitally and protect sensitive data by encrypting it to prevent altering it after signing documents. Many government agencies require DSCs, such as the Ministry of Corporate Affairs and the Reserve Bank of India.
DSCs typically last one or two years and can be renewed directly with a certifying authority or online portal; MCA lists these authorities. You may also purchase USB token-format DSCs to use with your computer.
2. Certificate of Incorporation (CIN)
As part of Nidhi Company Registration Online, the next step should be obtaining a Company Identification Number or CIN that serves as the identifier for your company. Once received, operations can commence; typically, this takes 15-25 days.
CINs contain three letters that indicate their categorization; six digits provide registration with the ROC; meanwhile, the last two digits represent the date of incorporation.
A CIN gives your company a professional image while helping it meet regulatory requirements and prevent penalties or legal disputes. Furthermore, a CIN ensures your organization follows best practices to maximize profits. Furthermore, opening bank accounts becomes simpler.
3. Director Identification Number (DIN)
A DIN is a number issued to an individual seeking to become a director in a company, providing them with information such as their name, address, date of birth and verification code. This data is stored by the Ministry of Corporate Affairs database. A DIN remains valid throughout one’s lifetime but may be cancelled or surrendered under certain conditions.
An individual seeking a DIN must complete and submit Form DIR-3. It must be digitally signed by either their company secretary, the managing director/CEO/CFO of an existing company where they wish to become directors or both. A passport should also be submitted as proof of identity. Once complete, the form should be filed through the SPICe platform with an application fee payable for processing your request.
4. PAN Card
Nidhi Companies differ from traditional NBFCs by accepting funds directly from or lending funds to members. Regulated by the Ministry of Corporate Affairs, they do not need to adhere to core provisions and planning associated with NBFCs; however, they must not deal in chit funds or hire-purchase finance.
Directors of Nidhi Companies must apply for DIN and DSC, submit a declaration that they do not fall under Indian laws, and get approval from the Ministry of Corporate Affairs before receiving a Certificate of Incorporation with CIN/TAN details.
Once they have accepted their documents, Nidhi Companies can open current bank accounts after filing INC-9 forms and creating MoA/AoA drafts by their directors – at which point, business operations can start; it should be noted however, that Nidhi Companies cannot accept deposits from non-members!
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