Introduction:-
Nidhi companies play a pivotal role in promoting the culture of savings and thrift in India. They are non-banking financial companies (NBFCs) that are essentially mutual benefit societies. These companies are formed to cultivate the habit of saving among their members while providing them with an avenue to lend and borrow funds.
Key Considerations for Nidhi Company Formation:-
1.Eligibility Criteria:
To form a Nidhi company, certain eligibility criteria must be met. This includes a minimum of 200 members, a minimum net owned fund of Rs. 10 lakhs, and a specified capital requirement.
2. Membership Requirements:
Members of a Nidhi company must be individuals and hold a membership for a minimum period as specified in the company's bylaws. A Nidhi cannot issue preference shares or debentures, and all members must have full voting rights.
3. Minimum Capital Investment:
Unlike other types of NBFCs, Nidhi companies do not require a substantial capital investment. They can start with a minimum paid-up equity share capital of Rs. 5 lakhs.
4. Directorship:
A Nidhi company must have at least three directors. All directors must be individuals and must hold a Director Identification Number (DIN) issued by the Ministry of Corporate Affairs.
5. Name Approval and Registration:
The chosen name for the Nidhi company must end with the word "Nidhi Limited". The proposed name needs to be approved by the Registrar of Companies (ROC) before the company is registered.
6. Object Clause:
The main objective of a Nidhi company is to cultivate the habit of thrift and savings among its members. The activities of a Nidhi are limited to borrowing and lending amongst its members.
7. Compliance with RBI Guidelines:
Nidhi companies need to comply with the guidelines issued by the Reserve Bank of India (RBI) for Nidhi companies. These guidelines cover aspects like minimum net owned funds, lending limits, and more.
Nidhi Company Registration:-
The registration process for a Nidhi company involves several steps:
1. DIN and DSC: Obtain Director Identification Number (DIN) and Digital Signature Certificate (DSC) for the proposed directors of the company.
2. Name Approval: Apply for name approval to the Registrar of Companies (ROC). The proposed name must comply with the naming guidelines.
3. Drafting of MOA and AOA: Draft the Memorandum of Association (MOA) and Articles of Association (AOA) for the Nidhi company.
4. Submission of Documents: Submit all necessary documents including MOA, AOA, and other required forms to the ROC.
5. ROC Approval: Once the documents are verified, the ROC will issue the Certificate of Incorporation.
6. Obtaining PAN and TAN: Apply for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the company.
7. Bank Account Opening: Open a bank account in the name of the Nidhi company.
Conclusion:-
Forming a Nidhi company Registration involves adhering to specific guidelines and meeting eligibility criteria. By understanding the key considerations and following the registration process diligently, one can establish a Nidhi company that fosters a culture of savings and thrift among its members.