Nidhi Company
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About Nidhi Company
Nidhi Company is a company registered under the Companies Act and notified as a Nidhi company by the Central Government under Section 620A of the Companies Act, 1956. It is a Non-Banking Financial Company (NBFC) doing the business of lending and borrowing with its members or shareholders. They are created mainly for cultivating the habit of thrift and savings amongst their members.
- A Nidhi company shall be incorporated under this Act as a Public Company.
- Minimum paid up equity share capital of 5,00,000/-.
- No preference shares shall be issued.
- The object of the company shall be cultivating the habit of thrift and savings amongst its members, receiving deposits from and lending to its members only for their mutual benefits.
- It shall have the words ‘Nidhi Limited’ as part of its name.
- Nidhi’s are more popular in South India and are highly localized single office institutions.
- A Nidhi company shall do business of borrowing from members and lending to members only.
Every Nidhi shall, within a period of one year from Incorporation, ensure that it has:
- Minimum number of members should be 200.
- Net owned funds shall be Rs.10,00,000/- or more.
- Ratio of net owned funds to deposit shall be not more than 1:20.
- Unencumbered term deposits of not less than 10% of the outstanding deposits as specified in Rule 14.
A Nidhi shall provide loans only to its members. The loans given to a member shall be subject to the following limits:
- Rs.2,00,000/- where the total amount of deposits from members is less than Rs.2 crores.
- Rs.7,50,000/- where the total amount of deposits from its members more than Rs.2 crores but less than Rs.20 crores.
- Rs.12,00,000/- where the total amount of deposits from its members is more than Rs.20 crores but less than Rs.50 crores.
- Rs.15,00,000/- where the total amount of deposits from its members is more than Rs.50 crores.
Documents Required
It is very easy to register this type of business as very few documents are needed. The required documents include:
- PAN card (Copy) of all the Directors
- Adhaar card (Copy) of all the Directors
- Passport size photo of all the Directors
- Voter id/ Driving Licence/ Passport
- Bank statement of all Directors
- Proof of Address(Power bill, Municipal tax bill, Sale deed copy)
- Rental Agreement or NOC
Registration Duration
Registration of Nidhi Company takes the shortest time and can be completed within a minimum of 7–10 working days. Despite registration taking the shortest time possible, this solely depends on government procedures and approvals during the time of your registration.
Registration Fee
The Government’s registration fee starts at Rs. 1,900, while professional fees start at Rs. 15,000. The variance would depend on the type of business, number of employees, location of the business, and specific requirements to be met while registering your particular business.
