Nidhi Company Registration

Nidhi Companies in India are created for cultivating the habit of thrift and savings amongst its members. Nidhi companies are allowed to borrow from their members and lend to their members. Therefore, the funds contributed to a Nidhi company are only from its members (shareholders). Nidhi companies are minute when compared to the banking sector and are mainly used to cultivate a saving amongst a group of people. To learn more about starting a Nidhi Company in India, you can also refer to the article “Starting a Nidhi Company” found in the IndiaFilings Learning Center. In this article, we mainly look at the nuances for registration of a Nidhi Company in India.

Nidhi Company Overview

Nidhi Companies are registered Limited Companies involved in taking deposits and lending to their members. The activities of a Nidhi Company does fall under the purview of Reserve Bank of India, as it is similar to an NBFC. However, as Nidhi Companies ONLY deal with shareholder-members money, RBI has exempted Nidhi Companies from the core provisions of the RBI and other regulations applicable to an NBFC.

Restrictions on Nidhi Company

The following are some of the restrictions a Nidhi Company is subject to under Nidhi Rules, 2014. As per Rule 6 of Nidhi Rules, 2014, a Nidhi Company shall NOT:

  • carry on the business of chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by any body corporate;
  • issue preference shares, debentures or any other debt instrument by any name or in any form whatsoever;
  • open any current account with its members;
  • acquire another company by purchase of securities or control the composition of the Board of Directors of any other company in any manner whatsoever or enter into any arrangement for the change of its management, unless it has passed a special resolution in its general meeting and also obtained the previous approval of the Regional Director having jurisdiction over such Nidhi;
  • carry on any business other than the business of borrowing or lending in its own name: Provided that Nidhis which have adhered to all the provisions of these rules may provide locker facilities on rent to its members subject to the rental income from such facilities not exceeding twenty per cent of the gross income of the Nidhi at any point of time during a financial year.
  • accept deposits from or lend to any person, other than its members;
  • pledge any of the assets lodged by its members as security;
  • take deposits from or lend money to anybody corporate;
  • enter into any partnership arrangement in its borrowing or lending activities;
  • issue or cause to be issued any advertisement in any form for soliciting deposit: Provided that private circulation of the details of fixed deposit Schemes among the members of the Nidhi carrying the words “for private circulation to members only” shall not be considered to be an advertisement for soliciting deposits.
  • Pay any brokerage or incentive for mobilising deposits from members or for the deployment of funds or for granting loans.

Nidhi Company Registration

To start a Nidhi Company in India, the first step is to incorporate a Limited Company, under the Companies Act, 2013. Hence, it requires a minimum of three Directors and seven shareholders to start the Limited Company incorporation process. During incorporation of the Nidhi company, care must be taken to ensure that the object of the Limited Company mentioned in the Memorandum of Association is that of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.

Post incorporation of the Limited Company, within a period of one year from the commencement, the Nidhi Company must meet all of the following criteria:

  • not have less than two hundred members (shareholders);
  • Have Net Owned Funds (NOF) of ten lakh rupees or more;
  • Have unencumbered term deposits of not less than ten per cent of the outstanding deposits; and
  • Have a ratio of Net Owned Funds to deposits of not more than 1:20.

“Net Owned Funds” means the aggregate of paid-up equity share capital and free reserves as reduced by accumulated losses and intangible assets appearing in the last audited balance sheet.

If the Nidhi Company satisfies the above conditions required for operating as a Nidhi Company, the company shall within ninety days from the close of the first financial year after its incorporation and where applicable, the second financial year, file a return of statutory compliances in Form NDH-1 duly certified by a practising CA/CS/CWA along with the requisite fees.

In the case at the end one year from commencement the Nidhi Company is not able to meet the above requirement, the Company may within thirty days from the close of the first financial year, apply to the Regional Director in Form NDH-2 for extension of time.

If even after the second financial year the Nidhi Company is not able to meet the requirements for a Nidhi Company, then the Nidhi Company shall not accept any further deposits from the commencement of the second financial year till it complies with the provisions for operating as a Nidhi Company and be liable for penal consequences.

Nidhi Amendment Rules, 2020

As per notification from the Ministry of Corporate Affairs on 3rd February 2020, the amendment to existing rules was released where the stakeholders are advised to use the revised and latest forms by the Nidhi companies and they are:

  • Form No.NDH-1 – Return of Statutory Complainces
  • Form No.NDH-2 – Application for extension of time
  • Form No.NDH-3 – Return of Nidhi Company for the half year ended

Check Business Name Availability

Find if business name can be registered with MCA in India

To register a company in India, the first step is to obtain name approval for the business from the Ministry of Corporate Affairs (MCA). This process takes about 24-48 hours. A private limited company name in India must end with the words private limited. One Person Company ends with (OPC) private limited. LLP end with LLP and Section 8 companies can end with words like foundation, association or institution.

A company name proposed to be registered cannot be identical or similar to an existing company name. Also, every company name must include a word that denotes the activity undertaken. For example, in VERVE Financial Services Private Limited - Financial Services denote the activity undertaken. Check Business Name Availability

Online Trademark Search

Enter a brand name to search across all trademark classes

All trademarks are registered in India with the Office of the Controller General of Patents, Designs and Trade Marks. A trademark application has to be filed under a class that denotes the type of goods or services the brand or logo represents. There are 45 trademark classes and each class represent a distinct type of goods or service.

Trademark search can be conducted using the tool above to check if any identical or similar brand or logo is registered or applied for under the same class. If there is an existing application, care must be taken while reapplying to ensure that the application is not rejected by the Trademark Registrar. Trademark Search

Proprietorship vs Limited Liability Partnership (LLP) vs Company

Features Proprietorship Partnership LLP Company
Definition Unregistered type of business entity managed by one single person A formal agreement between two or more parties to manage and operate a business A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company. Registered type of entity with limited liability to the owners and shareholders
Ownership
  • Sole Ownership
  • Min 2 Partners
  • Max 50 Partners

For One Person Company
  • 1 Director
  • 1 Nominee Director
Registration Time 7-9 working days
Promoter Liability Unlimited Liability Limited Liability
Documentation
  • LLP Deed
  • Incorporation Certificate
Governance - Under Partnership Act LLP Act, 2008 Under Companies Act,2013
Transferability Non Transferable Transferable if registered under ROF Transferable
Compliance Requirements
  • Income tax filing if turnover is more than Rs.2.5 lakhs
Know More

Nidhi Company FAQ's

How many people are required to register a Nidhi Company?

A minimum of 3 directors and 7 shareholders are required to register a Nidhi company in India.

What are the requirements to be a Director?

The Director needs to be over 18 years of age and must be a natural person.

Is an office required to start a Nidhi Company?

An address in India where the registered office of the Company will be situated is required. The premises can be commercial/industrial/residential where communication from the MCA will be received.

Do I have to be present in-person to incorporate a Nidhi Company?

No, you don’t have to be present at our office or appear at any office for the registration of a Nidhi Company.

What is a Digital Signature Certificate?

A Digital Signature establishes the identity of the sender or signee electronically while filing documents through the Internet. The Ministry of Corporate Affairs (MCA) mandates that the Directors sign some of the application documents using their Digital Signature.

What are the documents required for Nidhi Company registration?

Identity proof and address proof are mandatory for all the proposed Directors of the Nidhi Company. PAN Card is mandatory for Indian Nationals. In addition, the landlord of the registered office premises must provide a No Objection Certificate for having the registered office in his/her premises and must submit his/her identity proof and address proof.

How long it will take to incorporate a Nidhi Company?

IndiaFilings.com can incorporate a Nidhi Company for 20-30 days. The time taken for registration will depend on the submission of relevant documents by the client and the speed of Government Approvals. To ensure speedy registration, please choose a unique name for your Company and ensure you have all the required documents prior to starting the registration process.

How long is the registration of the Company valid?

Once a Nidhi Company is incorporated, it will be active and in existence as long as the annual compliances are met with regularly. A Nidhi Company must have a minimum of 200 shareholders and comply with other criteria within one year of incorporation. In case, annual compliances are not complied with, the Nidhi Company will be asked to refund the deposits.

What is DIN?

Director Identification Number is a unique identification number assigned to all existing and proposed Directors of a Company. It is mandatory for all present or proposed Directors to have a Director Identification Number. Director Identification Number never expires and a person can have only one Director Identification Number.

Who regulates the Nidhi Companies?

Ministry of Corporate Affairs regulates Nidhi Company and is also accountable for Nidhi Company Registration.

Can Nidhi Companies issue debt securities or preference shares?

No Nidhi Companies cannot issue debentures, preference shares, or any other kinds of debt securities.

Can Nidhi Companies operate in another state?

No, Nidhi Company cannot perform its operations outside the boundaries of the state in which the registration has taken place.

Can Nidhi Companies issue unsecured loans

No, Nidhi Company cannot issue unsecured loans. However, it can issue secured loans to its members.

Zero Late Fee Platform

Many small businesses pay lakhs in penalty every year to the Government for late filing various statutory returns. Such penalty or late fee paid is not tax deductible and is a drain on profitability. At IndiaFilings, our mission is to provide the most affordable services to our customers and help them avoid all late fee.To achieve our mission - we have built enterprise grade technology to help you proactively know the upcoming compliance and avoid penalty.Checkout our compliance services below, talk to an Advisor and stop paying unwanted late fees.

Zero Late Fee Platform

Related Business Registrations

In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.

MCA Compliance

Every registered entity has to comply with all the compliance obligations after the completion of each financial year. Majorly, it includes the audit of books of accounts, income tax return filing, and annual forms with the MCA.

Form Company Compliance Due date Penalty
COB Filing Commence of Business Certificate To be filed before 180 days of company Incorporation Rs.50,000 for non-compliance
DIR 3 EKYC Any director with DIN Before 30th September every year Deactivation of the DIN
A late filing fee of Rs.5,000
Disqualification of the Directors
Form ADT 1 Appointment of auditor Within 15 days from the date of appointment of the Auditor Late fees will be applicable, with fees ranging from 2 to 12 times the nominal fee, depending on the number of days of delay.
Form AOC 4 Filing financial statements of the company 30 days from the conclusion of the AGM Late fees will be applicable, with fees ranging from 2 to 12 times the nominal fee, depending on the number of days of delay.
Form MGT 7 Annual Returns of the Company 60 days from the conclusion of the AGM

In addition to the above filings, depending on the type of entity and business activity more compliance filing maybe applicable. Please check with an IndiaFilings Advisor to help you with the compliance for your company.

All Limited Liability Partnerships (LLP) registered in India are required to file statutory returns with the Ministry of Corporate Affairs (MCA) each year. IndiaFilings can help you maintain your LLP Compliance at a very affordable price.

Form LLP Compliance Due date Penalty
DIR 3 KYC For every designated partners of a limited liability partnership (LLP) with DIN Before 30th September every year Deactivation of the DIN
A late filing fee of Rs.5,000
Disqualification of the Partners
Form 11 Annual Returns May 30th every year Late fees will be applicable, with fees ranging from 1 to 50 times the nominal fee, depending on the number of days of delay.
Form 8 Statements of Accounts and Solvency 30th October every year Late fees will be applicable, with fees ranging from 1 to 50 times the nominal fee, depending on the number of days of delay.

Apart from the aforementioned filings, there might be additional compliance filings that could be relevant for LLPs. Please consult with an IndiaFilings Advisor to assist you with the compliance needs of your LLP.

Entity Form Due date
Private Limited Company Annual Return (Form MGT-7) 60 days from the conclusion of the AGM or 28th November 2023 (Which Ever is Earlier)
Financial Statements (Form AOC-4) 29th October 2023
DIR-3 KYC 30th September 2023
Form DPT-3 30th June 2023
Form ADT-1 15th October 2023
ITR 6 (Non audit case) 31st July 2023
ITR 6 (Audit Cases) 31st October 2023
GSTR 9 31st Dec 2023
Limited Liability Partnership ITR 5 (Non audit case) 31st July 2023
ITR Form 5 (Audit case) 30th September 2023
Annual return - Form 11 30 May 2023
Financial Statements - Form 8 30 October 2023

Note : Get in touch with our experts to efficiently handle your compliance filings, whether you are an LLP, a company, partnership firm or a proprietorship. Contact us to ensure your compliance is filed before the due date.

Smarter Banking

Avail a range of banking services through IndiaFilings.com. IndiaFilings can help you open a current account, get a payment gateway or avail loans through our Partner Banks.

Customer Reviews For Nidhi Company

IndiaFilings has over 1 lakh customers and we have completed over 7 lakh services through our platform. At IndiaFilings, we take pride in the services delivered by us and guarantee your satisfaction with our services and support. We constantly improve and strive to deliver the best accounting, financial or secretarial services through the internet.

SARITHA P

Nidhi Company
Verified Customer
11 June 2019
How can we improve?

good

NAGA KRISHNAVENI V

Nidhi Company
Verified Customer
16 May 2019
How can we improve?

Best Service And friendly work.. like as..

JAWED AKHTAR ANSARI

Nidhi Company
Verified Customer
26 December 2018
How can we improve?

Good

PATHAN FARJANA

Nidhi Company
Verified Customer
30 November 2018
How can we improve?

service is better

DHVANI MODI

Nidhi Company
Verified Customer
30 October 2018
How can we improve?

very nice service

KARUNYA ROSE J

Nidhi Company
Verified Customer
20 September 2018
How can we improve?

need to be more engagement with client and knowledge delivery to client

CHITRA BHANU

Nidhi Company
Verified Customer
06 May 2018
How can we improve?

Staffs very suppotive and eager to help anytime. Good blend of experience and professionalism.

MUHAMMAD RAFIQUE

Nidhi Company
Verified Customer
04 May 2018
How can we improve?

For my point of view it is good....

Nidhi Company Registration in State


Nidhi Company Registration in City


X
User

Live Chat!

We are available

You will be connected with an IndiaFilings Advisor to discuss about Nidhi Company through IndiaFilings.com.

loading...