Introduction:-
Setting up a Nidhi Company Registration in India involves a series of legal procedures and compliance with specific requirements laid down by the Ministry of Corporate Affairs. A Nidhi Company is a type of non-banking finance company which is primarily engaged in borrowing and lending money to its members. It aims to cultivate the habit of thrift and savings amongst its members.
Understanding Nidhi Companies:-
A Nidhi Company, also known as a Mutual Benefit Company, can only be incorporated as a public limited company. The key feature of a Nidhi Company is that it can only deal with its members, and it cannot accept deposits or lend money to the general public.
Registration Process:-
1. Minimum Capital Requirement
To initiate the registration process, a Nidhi Company must have a minimum paid-up equity share capital of Rs. 5 lakhs.
2. Minimum Number of Members
A Nidhi Company must have at least 200 members within a year of incorporation. Additionally, it should have a minimum of three directors.
3. Name Approval
The chosen name of the Nidhi Company must end with the words "Nidhi Limited". It is crucial to ensure that the name complies with the naming guidelines provided by the Ministry of Corporate Affairs.
4. Application for Incorporation
After obtaining name approval, the company must submit an application to the Registrar of Companies (ROC) for incorporation.
5. Memorandum and Articles of Association
The Memorandum of Association and Articles of Association must be filed with the ROC. These documents outline the objectives and rules of the Nidhi Company.
6. Director Identification Number (DIN)
All the directors of the company must obtain a Director Identification Number (DIN). This can be done by filing Form DIR-3 with the ROC.
7. Permanent Account Number (PAN) and Tax Deduction Account Number (TAN)
After incorporation, the company must apply for PAN and TAN with the Income Tax Department.
Post-Registration Compliance:-
Once a Nidhi Company is registered, it must adhere to several ongoing compliance requirements:
1. Minimum Net Owned Funds (NOF)
A Nidhi Company must maintain a minimum Net Owned Funds of Rs. 10 lakhs.
2. Acceptance of Deposits
It can only accept deposits from its members, subject to certain limits and conditions specified by the Ministry of Corporate Affairs.
3. Restrictions on Lending
A Nidhi Company can lend only up to a certain limit, and the loans must be given to its members only.
4. Regular Filings
The company must file annual financial statements, income tax returns, and other relevant documents with the ROC.
Conclusion:-
Navigating the Nidhi Company registration process requires careful adherence to legal requirements and a clear understanding of the specific regulations set forth by the Ministry of Corporate Affairs. By following these steps and maintaining ongoing compliance, a Nidhi Company can operate successfully and achieve its mission of promoting thrift and savings among its members.