What is Nidhi Company?
The expression “Nidhi” means “funds” and as needs be, a Nidhi Company is a non-banking financial entity under the Companies Act 2013 (the act) with the predominant goal of seeking after judiciousness and investment funds among its individuals, getting stores from and loaning cash to its individuals for their mutual benefit. section 406 of the Act and the Companies Rules 2014 provide for Nidhi Company and other ancillary matters related to such Companies. So as to be qualified as a Nidhi Company, an element must be informed as a “mutual benefit society” by the central Government. They are so notified because their transactions are strictly limited to its shareholders and members. Their principal wellspring of funds is the commitment gotten from such individuals as stores and their principal wellspring of gaining is from the intrigue gotten upon the organized loaning of such funds to its individuals.
Number of members
Minimum of seven members is required to start a Nidhi Company out of which three members must be the directors of the company.
Share Capital and Owners’ Funds
A minimum of 5 lakh rupees, is required as the equity share capital to start a Nidhi Company. Nidhi Company can’t issue preference shares.
Activities prohibited in the nidhi company
Nidhi Company can’t deal with chit funds,Nidhi Company can’t deal with hire-purchase finance
Nidhi Company can’t deal with leasing finance
Nidhi Company can’t deal with insurance or securities business.
Nidhi Company is strictly prohibited from accepting deposits from or lending funds to, any other person except members.
Also, it can’t advertise itself to ask for any deposits.
Forms to be filed in Nidhi Company:-
The forms which needs to be filed for Nidhi Company are:-
INC 9
DIR 2
Documents required for registration:
- Proof of the registered place of business (Ownership documents/ rent or lease agreement)
2. No Objection Certificate (signed by the owner/ landlord)
3. Identity proofs
4. Address proofs of the members
5. Photos of the members
6. PAN card copies of the members
7. Digital Signature (DSC)
8. Director Identification Number (DIN) of the directors
9. Memorandum of Association of the company (MoA)
10. Articles of Association of the company (AoA)
Procedure for Nidhi Company
1.DSC & DIN (02 Days)
2.MOA & AOA(02 Days)
3.Name approval of the Company(02 Days)
4.Form Submission(02 Days)
5.Col(Certificate of Incorporation)(04 Days)