Operate in lending borrowing finance business via Nidhi Company Registration

Nidhi companies are getting popular day by day among the Indian public. It can be due to its easy and fast lending and borrowing services amongst its members. In this article, we will discuss some important points related to Nidhi company registration.

What is Nidhi company registration?

A Nidhi company belongs to a Non-Banking Financial company (NBFC) in India. A Nidhi company in India is incorporated and defined under the section 406 of the Companies Act, 2013. It is governed by the central government as the Nidhi company rules, 2014. Reserve bank of India has full authority to give directions in Nidhi company regarding the issues related to the acceptance of the deposits. Nidhi company registration makes the company encourages the habit of saving among the members of the company.

What are the objectives of Nidhi Company Registration?

Here are the main objectives of the Nidhi Company incorporated under the Companies Act, 2013:

• Nurture the habit of people to save money
• Lending and receiving money from the members of the company so that it could be used for their own benefits.
• Nidhi company registration is the cheapest and safest way to raise fund from the public by just registering them as the member of the company.

What are the main requirements for Nidhi Company Registration?

To register a Nidhi company you need to fulfill the following requirements as stated in Nidhi company rules, 2014:

Share Capital: Minimum share capital required to register a Nidhi company is Rs. 5 lakhs. Net owned funds within the one year of the formation should not exceed than Rs. 10, 00,000. It is the sum of free reserved and equity share capital reduced by the intangible and stored assets appeared in the last audited balance sheet.

Shareholders and Directors: Minimum number of 3 directors and 7 members are required for Nidhi company registration in India. The first director of the company can be a member of the company also. You need to have minimum number of 200 members within the 1 year of incorporation of Nidhi Company.

Name requirements: It is mandatory for every Nidhi company to have ‘Nidhi Limited’ as a part of its company’s name.

Deposits and accounts: the term deposit should not be less than 10% of the o/s deposits. It is mandatory to file audits, tax returns and annual accounts. The ratio of the net owned funds to the deposits should not be more than 1:20.

What is the process for Nidhi Company Registration in India?

• Obtain a DSC (DIGITAL SIGNATURE CERTIFICATE) for all the authorized signatories and directors. An application to obtain a DSC is made before the digital signature authority agents.
• Obtain a DIN (DIRECTOR IDENTIFICATION NUMBER) for all the respective directors of the company.
• Get a name reservation by checking the availability of the company’s name on MCA. RUN is used to verify the name over MCA.
• Formulation of the documents: memorandum of association and article of association are the most important documents for the registration purpose. They define the objectives of the proposed Nidhi Company. So, it is very important to take the help of the expertise for the formulation and drafting the MOA and AOA. Swarit advisors can help you in drafting any kind of legal documents.
• After that, file a Nidhi company registration application in the form of SPICE 32 along with the necessary documentation. MOA and AOA is attached along the application as an attachment.
• On the receipt of the application, registrar of the company will scrutinize it minutely. If all things goes well registrar will issue the certificate of incorporation to the Nidhi Company.

Conclusion: Nidhi companies have great benefits for its members. To avail all these benefits one needs to register the Nidhi Company under the central government. Get your registration now with the help of Swarit advisors by just dropping a mail at info@swaritadvisors.com or call them on their helpline number +91–9821399320.