Nidhi Company is governed by Section 406 of the Companies Act, 2013 and Company Nidhi Rules, 2014 which has a sole objective of cultivating the habit of thrift and savings amongst its members. Nidhi companies are allowed to take deposit from its members and lend to its members only. Therefore, the funds contributed for a Nidhi company are only from its members (shareholders) and used only among the shareholders of the Nidhi Company.
Nidhi Company is a class of NBFCs and RBI is empowered to issue directions to them in matters relating to their deposit acceptance activities. However, in recognition of the fact that these Nidhis deal with their shareholder-members only, RBI has exempted the notified Nidhis from the core provisions of the RBI Act and other directions applicable to NBFCs. Therefore, Nidhi Company is an ideal entity to take deposit from and lend to a specific group of people.
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 time. If the total members falls less than 200 at anytime thereafter, it will leave the company at default. However, if you are not able to reach the limit of 200 members, then you must apply for time within 30 days of closure of financial year in Form NDH-2 with Regional Director, Ministry of Corporate Affairs.
The Applicants are required to file name availability in RUN facility of MCA portal. Every Company proposed to be incorporated as a “Nidhi” shall have the last words ‘Nidhi Limited’ as part of its name. Now, one doesn’t require digital signature of applicant for name availability.
The proposed Directors who may also be the Promoters/Applicants of Nidhi Company have to obtain Class 2 DSC.
After the name approval, File form SPICe 32 with following attachments for incorporation of Nidhi Company.
It will take 15-20 days to get the incorporation certificate of Nidhi Company once all the documents have been filed and registration fee and stamp duty paid. Incorporation certification is a proof that all the formalities regarding the incorporation have been complied with.
Following Documents require from Members/Directors
Proof of Registered office
Other Declarations and Affidavits from proposed 1st Directors of Nidhi Company in the prescribed Format.
Nidhi Company can’t enter into following transactions:
Nidhi shall file a return of statutory compliances in Form NDH–1 within 90 days from the closure of the financial year with the Registrar duly certified by a Company Secretary in practice or a Chartered Accountant in practice or a Cost Accountant in practice.
If the company is not complying with the minimum member criteria, it shall within 90 days from the close of the first financial year, apply to the Regional Director in Form NDH -2 for extension of time and the Regional Director may consider the application and pass orders within 30 days of the receipt of the application.
Nidhi has to file form NDH-3 within 30 days from the conclusion of each half year, duly certified by a company secretary in practice or chartered accountant in practice or cost accountant in practice.
No. Nidhi’s are not required to take RBI license for incorporation. RBI has exempted the Nidhi’s from the core provisions of the RBI Act and other directions applicable to NBFCs. As on date, RBI does not have any specified regulatory framework for Nidhi’s. The provisions of Section 45-IA (Compulsory Registration with RBI), Section 45-IB (Maintenance of Liquid Assets), Section 45-IC (Creation of Reserve fund) have been exempted for Nidhi Companies. However, R.B.I can issue direction to Nidhi’s.