Nidhi Company Incorporation and Requirements

Nidhi Company– A Company Which Has Been Incorporated With The Objective Of Cultivating The Habit Of Thrift And Savings Amoungst Its Members, Receiving Deposits From And Lending To Its Members Only, For Their Mutual Benefit, And Complies With The Rules Of Chapter Xxvi Nidhis Rules, 2014 Made By The Central Government.

In General Terms It Is A Non-Banking Finance Company, Engaged In The Business Of Lending And Borrowing Funds With Its Members Only.

General Requirements To Incorporate A Nidhi Company:

1. Minimum Capital Requirement Is Rs/- 5,00,000 Only.

2. Minimum Number Of Members Required Is 7 Out Of Which 3 Can Be The Directors.

3. Any Public Company Can Make Application In Form Ndh-4 Along With Fees To Get The Status Of A Public Company.

And A Nidhi Company Incorporated On Or After Commencement Of Nidhi Rules 2014, Shall File Form Ndh-4 Within 60 Days From Expiry Of One Year From Its Incorporation Date Or The Period Upto Which Extension Of Time Granted By Regional Director.

If Any Nidhi Compnay Does Not Comply With The Above Provision It Shall Not Be Allowed To File Sh-7 And Pas-3.

4. Nidhi Company Shall Only Have The Object Of Cultivating The Habit Of Thrift And Savings Amoungst Its Members, Receiving Deposits From And Lending To Its Members Only, For Their Mutual Benefit In Its Memorandum Of Association.

5. Every Nidhi Company Shall Have Last Word “Nidhi Limited” In Its Name.

6. Requirements After Its Incorporation

• Minimum Number Of Members Should Be 200.
• Net Own Funds Of 10 Lac Rs/- Or More.
• Ratio Of Net Own Funds To Deposits Be Not More Than 1:20.
• Unencumbered Term Deposits Of Not Less Than 10% Of Its Outstanding Deposits.
• Every Nidhi Shall File Its Return Of Statutory Compliance In Form Ndh-1 Along With Fees Within 90 Days From The Closure Of Its First Financial Year/Where Applicable Second Financial Year To The Registrar Duly Certified By The Company Secretary In Practice Or Chartered Accountant In Practice Or A Cost Accountant In Practice.
• Every Nidhi Company Shall File Its Half Yearly Return With Registrar In Form Ndh-3 Along With Fees To The Registrar Within 30 Days Of Conclusion Of Each Half Year Duly Certified By The Company Secretary In Practice Or Chartered Accountant In Practice Or A Cost Accountant In Practice.

7. General Restrictions On Nidhi Companies:

• Can Not Issue Preference Shares, Debentues.
• Restricted To Carry On Business Of Chit Funds, Hire Purchase, Lease Finance, Insurance Etc.
• Can Not Open Current Account With Its Members
• Restricted To Acquire Another Company
• No Nidhi Company Can Accept Deposits From Or Lending To Other Than Its Members.
• No Nidhi Company Can Carry On Business Other Than Borrowing Or Lending.
• Nidhi Company Shall Not Admit Any Body Corporate, Trust, Minor As Its Member.

8. Nidhi Company Can Provide Loan To Its Own Memmbers Only Within The Following Limits:

9. Documents Required To Incorporate A Nidhi Company:

• Pan Card Of Each Member
• Photograph Of Each Member
• Id Proof- Aadhar Card, Voter Id, Driving License, Passsport
• Address Proof- Bank Statement, Telephone Bill, Electricity Bill
• Registered Office Address Proof- Electricity Bill, Rent Agreement, Copy Of No Objection Certificate