Introduction:-
Setting up a Nidhi Company can be an excellent way to promote the culture of saving and thriftiness within a community. Nidhi Companies, as regulated by the Ministry of Corporate Affairs, aim to facilitate lending and borrowing among its members. To ensure a smooth Nidhi company registration process, it's crucial to understand the legal aspects involved.
Understanding Nidhi Companies:-
A Nidhi Company, under the Companies Act, 2013, is a non-banking financial company that primarily deals with borrowing and lending money among its members. These members actively contribute to the company's operations, making it a self-sustained financial entity.
Legal Requirements for Nidhi Company Registration:-
1. Minimum Members
A Nidhi Company must have at least 200 members within one year of its incorporation. It should also maintain a minimum of 200 members throughout its existence.
2. Minimum Capital Requirement
To commence the process of Nidhi Company formation, it's imperative to have a minimum paid-up equity share capital of Rs. 5 lakhs.
3. Unique Name
The name of the Nidhi Company should include the term 'Nidhi Limited'. This term is a legal requirement to distinguish it from other types of companies.
4. Object Clause
The main objective of a Nidhi Company is to cultivate the habit of thrift and savings amongst its members. This must be explicitly mentioned in the Memorandum of Association (MOA).
5. Restrictions on Activities
A Nidhi Company is prohibited from engaging in activities such as chit fund, hire-purchase finance, and leasing finance, among others.
6. Board of Directors
A Nidhi Company must have at least three directors. Out of these, one director must be an independent director.
7. RBI Compliance
While Nidhi Companies are exempted from obtaining a license from the Reserve Bank of India (RBI), they must still comply with the rules and regulations set by the RBI.
8. Documentation
Proper documentation, including identity proofs, address proofs, and photographs of the directors, is required for the Nidhi company registration process.
Online Nidhi Company Registration:-
The process of registering a Nidhi Company has been made much more convenient in recent times. With the advent of online registration services, entrepreneurs can complete the entire process from the comfort of their homes or offices.
Steps for Online Nidhi Company Registration:-
- Obtain Digital Signature Certificates (DSCs): The directors must obtain DSCs, which will be used to sign the electronic documents during the registration process.
- Director Identification Number (DIN): All directors must obtain a DIN. This can be done by filing an eForm DIR-3.
- Name Approval: Once DINs are acquired, the next step is to apply for the company name through the RUN (Reserve Unique Name) web service.
- MOA and AOA Submission: Draft the Memorandum of Association (MOA) and Articles of Association (AOA) and file them electronically.
- Application for PAN and TAN: Apply for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the company.
- Certificate of Incorporation: Upon successful verification, the Registrar of Companies (ROC) will issue the Certificate of Incorporation.
- Commence Business: After obtaining the Certificate of Incorporation, the Nidhi Company can commence its operations.
Conclusion:-
Forming a Nidhi Company involves a systematic process that requires adherence to legal guidelines. By understanding these aspects, entrepreneurs can navigate through the process with ease. Online Nidhi company registration services further simplify this process, making it accessible to a wider audience.