Nidhi Company is a type of Non-Banking Financial Company (NBFC). Nidhi Company Registration is done with an intention to cultivate savings among members and to provide finance among members only. It is allowed to take loans from members and can lend to only members. Hence, it can not accept deposits or lend from/to non-members.
Incorporating Nidhi is very easy as compared to a Non Banking Financial Company as for Nidhi company, License by Reserve Bank of India is not required. Though there are no separate registrations to be done under RBI for a Nidhi company, RBI is empowered to issue any directives to them. It should also be noted that the Nidhi Companies fall under the purview of the Reserve Bank of India as the functioning of Nidhi Companies is similar to NBFCs. Nidhi Companies are as such exempted from main provisions otherwise applicable to an NBFC in India. It requires minimum 7 members and 3 directors to start with. Nidhi Companies are registered as Public Companies and should have Nidhi Limited at the last of the name. Nidhi Company is very easy to form and there are minimum compliances afterward as compared to NBFCs.
1. Passport size Photograph of all the Directors and Shareholders
2. PAN and Aadhar card of all the Directors and Shareholders
3. ID proof of all the Directors and Shareholders (Driving License/Voter ID/Passport)
4. Address Proof of all the Directors and Shareholders (Bank statement/Electricity Bill/Telephone Bill) not older than 1.5 months having name of the respective Director and Shareholder.
5. Registered Office Address Proof (Electricity Bill/Water Bill/Gas Bill or any other utility bill) not older than 1.5 months
1. A Nidhi Company must have a registered office in India. Documents like bank statement or electricity bill should be recent.
2. A utility bill, rent agreement or sale deed and an NOC (Non-Objection Certificate) from the landlord with his / her consent to use the office as a registered office of a company must be submitted as well.
3. There must be minimum 7 Member in a Nidhi Company.
1. Experienced and dedicated personnel assigned for engagement.
2. Collection of required documents along with a simple checklist.
3. Verification of the Documents as required for Incorporation by our incorporation experts.
4. Process of application of Digital Signature Certificate.
5. Name approval application submitted to MCA.
6. Drafting of the essential documents by our Assigned Personnel based on the MCA approved name.
7. Signing of documents by the Directors and Shareholders.
8. Submission of documents along with Incorporation Form to MCA for approval.
9. Once MCA approves, it will grant Certificate of Incorporation and the company will be Incorporated.
1. A Nidhi Company enjoys the benefit of Separate Legal Identity in the eyes of law which clearly states that assets and liabilities of the business are not the assets and liabilities of the Directors.
2. A Nidhi Co. encourages its members to save money and encourages a thrifty lifestyle. It is a company wherein members can lend or borrow money and accept financial loans amongst themselves.
3. Interest in Nidhi Company can be easily transferred by transferring its shares. Its board of management is easily transferable as such.This is effected through filing of forms with ROC.
4.Members, when in need, can borrow from the company at bank rates. This can really come handy in case of need and rates are comparatively very cheap in comparison to other sources of finance.
5. A Nidhi Company operates on principles of mutual benefits. No one member or a group of members get benefited. Nidhi Company allows right to every member to access credit facilities when in need.
6. All the information relating to the company are made available in a public database. This feature makes it easy to authenticate the existence of the business that ultimately helps in improving business credibility.
Nidhi Company is required to file returns twice a year and yearly returns once with ROC every year. Apart from this Nidhi Company is also required to file its Financial Statements in Form AOC 4 and Annual Return in form MGT 7 annually with ROC.
Every Nidhi Company is required to comply with provisions of Companies Act, 2013 and Nidhi Rules, 2014. In a way every Nidhi Company is a Public Limited Company. Hence it requires to follow all the provisions applicable to Public Limited Company unless exempted from compliance of specific section with or without any modification.
All registered Indian Companies must appoint a Statutory auditor within 30 days of incorporation. The auditor also needs to be appointed within 15 days from the conclusion of AGM. Therefore, the due date for ROC Form ADT 1 would be 14th October every year.
The capital mentioned in the MOA [Memorandum of Association] must be deposited in a bank and commencement certificate must be obtained from MCA within 180 days of incorporation.
Every company in India is mandatory required to hold an Annual General Meeting once a year to do its ordinary business. Companies are required to keep their AGM within six months from closing the financial year i.e. 30th September every year
Every nidhi Company shall maintain proper books of accounts which shall represent an accurate and fair value of the state of affairs of the company. Accounting is necessary for the statutory audit. Annual filing and Income tax return filing which is mandatory.
Every Nidhi Company registered under the Companies Act, 2013, irrespective of its sales turnover or nature of business or capital must have its book of accounts audited each financial year.
It is mandatory for the Nidhi Company to get their accounts audited under MAT i.e. Minimum Alternate Tax. The objective of the introduction of MAT was to bring into the tax net “zero tax companies” which in spite of having earned substantial book profits and having paid handsome dividends, do not pay any tax due to various tax concessions and incentives provided under the Income-tax Law.
Form NDH 3 is a half yearly compliance of Nidhi Company. It contains the details of number of Members admitted and ceased during the half year, details of Members, Loan etc Form NDH 3 to be filled with ROC within 30 days from the close of each half year.
This is a Statutory compliance of Nidhi Company. Form NDH 1 contains all the details regarding the members, loans , deposits, reserves etc for the full financial year. Every Nidhi Company is required to file Form NDH-1 with ROC within 90 days form the closure of Financial Year.
Like every other company, Nidhi Company is required to file its Financial Statements, along with Notice calling General Meeting, Directors Report, Auditors Report and Balance sheet to ROC within 30 days from the date of Annual General Meeting of the Company.
Every Nidhi company is required to file its Annual Return along with List of members of Nidhi Company within 60 days from date of Annual General Meeting. The annual returns are to be filed in Form MGT 7 with ROC.
DIR 3 KYC is a form to be filed by Every director who has been allotted DIN (Director Identification Number).
Nidhi companies are required to file its Income tax return in Form ITR 6 within the period of 6 months from the closure of financial year. Hence the due date for filing Form ITR 6 would be 30th September every year.
With our experienced and skilled personnel, We at UpriseLegal makes process of registering your Nidhi Company very smooth and helps you in each and every step of company formation. We follow law to the core and uses our knowledge to avoid any hassles in your business so that you can rise and grow! You may get in touch with our compliance manager on 9173512402 or email us at [email protected] for free consultation.