Registration Process of Nidhi Company

Written by Saptaparni Raha, Lawyer

Introduction:

A Nidhi company has been mentioned under section 406 of the Companies Act. It refers to a type of entity in the non-banking finance sector. These companies are known as the benefit funds, permanent funds, mutual benefits, and mutual benefits funds. Every direction related to deposit acceptance activities is done by the Ministry of Corporate Affairs. There is no RBI consent necessary for this company. This is the reason that the incorporation procedure is effortless. Nidhi companies may be incorporated as public companies, but Nidhi Limited must be attached at the end of their name.

Conditions:

• A Nidhi company must have a minimum of 7 members, out of which 3 members would-be directors.

• Minimum of 5 lakhs rs. equity shares must be with the Nidhi company.

• A Nidhi company must be recognized as a limited company under the Companies Act 2013.

• A Nidhi Company must include its object in its Memorandum of Association. It will reflect an intention to foster the habit of thrift and savings among the members.

Documents Required for Registration:

• Directors Identification Number

• Pan Number of respective members

• Photographs of respective members and directors

• Aadhar card

• You must have a registered business place with proof of lease or rental agreement.

• If you own your business place, then you need to have ownership proof.

• No objection certificate

• Memorandum of Association

• Article of Association

Registration Process:

• Directors may need to obtain their Digital Signature Certificate.

• The Director's Identification Number, another important document to form the company, needs to be obtained from any Ministry of Corporate Affairs certified agency. The agency would charge a standard fee to render such services, including some primary documents for the same.

• After this, the three best unique names must be suggested for the company to the Ministry of Corporate Affairs.

• The approved name would be valid for only 20 days.

• Now directors may have to apply for registration with the Article of Association and memorandum of association.

• After this, the appropriate authority will grant the incorporation certificate within 15 to 20 days.

Conclusion:

A Nidhi company helps to foster the habit of thrift. It also reserves funds amongst its serving members.

References:

Corpbiz, Nidhi Company Registration, retrieved from https://corpbiz.io/nidhi-company-registration

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