Introduction:-
Nidhi Companies, a type of non-banking financial institution, have gained significant popularity in recent years due to their unique structure and benefits. These companies primarily work towards cultivating the habit of thrift and savings amongst its members. If you're considering venturing into the world of financial services through a Nidhi Company, this article will serve as your blueprint for success.
Understanding Nidhi Companies:-
Nidhi Companies, regulated by the Ministry of Corporate Affairs, are often described as mutual benefit societies. Their core objective is to encourage saving habits and channelize these savings for the mutual benefit of its members. These companies do not engage in lending or borrowing from external sources.
Key Features of a Nidhi Company:-
Incorporation as a Public Limited Company: A Nidhi Company Registration is incorporated under the Companies Act, 2013, with the minimum requirement of seven members.
Minimum Capital Requirement: To start a Nidhi Company, it's essential to have a minimum paid-up equity share capital of Rs. 5 lakhs.
Membership Criteria: Members must be individuals and hold at least ten equity shares. Additionally, they need to meet specific eligibility criteria defined by the company.
Prohibition on External Borrowing: Nidhi Companies are restricted from accepting deposits or loans from anyone other than their members.
Unsecured Loans: These companies can provide unsecured loans to their members, but the amount should not exceed two times the net assets.
Steps for Nidhi Company Registration:-
Step 1: Name Approval
Choose a unique name for your Nidhi Company and ensure it aligns with the guidelines set by the Ministry of Corporate Affairs.
Step 2: Memorandum and Articles of Association
Draft and file the Memorandum of Association (MOA) and Articles of Association (AOA) of the company.
Step 3: Obtaining Digital Signatures
Directors of the company must obtain digital signatures which will be used in the electronic filing process.
Step 4: Apply for Director Identification Number (DIN)
Directors must apply for a DIN, which is a unique identification number assigned to them.
Step 5: Filing of Incorporation Documents
Submit the required documents including MOA, AOA, and other necessary forms to the Registrar of Companies (ROC).
Step 6: Issue of Certificate of Incorporation
Once the ROC is satisfied with the documents, they will issue a Certificate of Incorporation, making your Nidhi Company officially registered.
Step 7: Commencement of Business
Within a year of incorporation, the company must commence its operations.
Conclusion:-
Establishing a Nidhi Company can be a rewarding venture, providing a platform for members to save and borrow within a close-knit community. By following the steps mentioned above, you'll be on your way to creating a successful financial institution.