Considering starting a Nidhi Company, you are on the path to becoming a valuable financial institution for your community. Nidhi Companies are non-banking financial entities that work for the mutual benefit of their members. They are regulated by the Ministry of Corporate Affairs in India. Here's all you need to know about starting a Nidhi Company Registration:
Understanding a Nidhi Company:-
A Nidhi Company primarily deals with borrowing and lending money between its members. It operates on the principle of mutual benefit, and its main source of funds comes from the contributions of its members. Nidhi Companies are not allowed to deal with any other form of business, and they do not require a license from the Reserve Bank of India.
Key Requirements for Nidhi Company Registration:
- Minimum Number of Members: A Nidhi Company must have at least 200 members within a year of its registration.
- Minimum Capital Requirement: The company must have a minimum paid-up equity share capital of Rs. 5 lakh.
- Name and Object: The name of the company must include the words "Nidhi Limited". The main object of the company must be cultivating the habit of thrift and savings among its members.
- Board of Directors: A minimum of three directors are required to start a Nidhi Company. They must be individuals and at least one of them must be a resident of India.
- Registered Office: The company must have a registered office address within the jurisdiction of the Registrar of Companies.
Steps for Nidhi Company Registration:-
- Incorporation Application: Submit the necessary documents and application forms to the Registrar of Companies (ROC).
- Name Approval: Once the application is received, the ROC will verify the documents and approve the name.
- MOA and AOA Drafting: Draft the Memorandum of Association (MOA) and Articles of Association (AOA) of the company. These documents outline the rules and regulations of the company.
- Subscription of Shares: Members must subscribe to the shares of the company and pay the necessary subscription amount.
- Filing of Documents: Submit all the required documents to the ROC, including MOA, AOA, and other statutory forms.
- Certificate of Incorporation: After successful verification, the ROC will issue the Certificate of Incorporation.
Post Registration Compliance:-
- Minimum Net Owned Fund (NOF): A Nidhi Company must maintain a minimum Net Owned Fund of Rs. 10 lakh.
- Credit and Lending Policy: The company should have a clear policy regarding the disbursement of loans and should ensure that all loans are within the prescribed limits.
- Restrictions on Lending: There are certain restrictions on lending to a single borrower, which must be adhered to.
- Auditing and Reporting: The company should get its accounts audited annually and submit the necessary reports to the ROC.
Starting a Online Nidhi Company Registration can be a rewarding venture, providing financial services to the community and fostering a culture of savings. Ensure that you adhere to all legal and regulatory requirements for a smooth operation.