Before embarking on the process of Nidhi Company Registration, there are crucial factors to consider ensuring a smooth and successful establishment. This article highlights key aspects that aspiring entrepreneurs must remember before proceeding with this. By considering these crucial elements, entrepreneurs can navigate the complexities and set a strong foundation.

Minimum Requirement of Registration

Fulfilling all the criteria and going through the details for nidhi company registration is necessary. It deals with small funds from the members as per the rules. These rules and regulations guide the company to handle its collective funds. Also, following the rules and requirements will save the company from all hurdles from its regulators.

The date of incorporation must get fixed first for the company. The Nidhi rules provide specific detail about the incorporation date. But first, you need to frame a date for registering your company. You must remember the date for compiling the details for your company.

All minimum requirements for establishing a Nidhi company are detailed here. Before completing 120 days after the registration, the company must have these things.

  1. Minimum 200 members
  2. The net owned fund of the company must be 20 times more than the net deposit value (i.e., net owned fund: net deposit = 1: 20)
  3. Net owned fund must be over 20 lakhs
  4. Unencumbered deposits must be over 10%.

Nidhi Company Registration

Nidhi Rules of 2014

The Ministry of Corporate Affairs has framed rules for the establishment and management of Nidhi companies. These companies are more like societies where members are the owners. The ministry has stressed more on the mutual benefits of the members. So, these companies must work for the mutual benefit of their members. Interestingly, the same Nidhi rules are also applicable to mutual benefit societies.

The company must submit form NDH-1 within 90 days from the end of the first financial year. A hired chartered accountant or company secretary must do this task on the company’s behalf. Companies Rules of 2014 (Registration Offices and Fees) talk about fees which must get paid when submitting the form.

Duly submission of the NDH form is necessary for the company. Otherwise, the company will get restricted from accepting deposits from the members. Some other specific criteria are also there for compiling the documents.

MCA also has pointed out some restrictions for Nishi companies. Here is the list of restrictions that these companies cannot perform.

Restrictions (as per Rule 6)

  • These companies cannot carry out the business like chit funds.
  • Can’t acquire securities or deliver insurance to the members.
  • Never issue debentures or shares or any other financial instruments
  • Cannot create current accounts for its members
  • Cannot get merged with other companies operating in the same or other business. If the company does that, permission from all members is required.

There are some special rules that the company must follow in a coherent manner. These special rules help these companies in managing funds and operations.

First, the business must have a separate name and have a suffix with Nidhi Limited.  These companies can also provide facilities like a traditional bank. Locker facilities are among them, but they must not exceed 20% of the annual gross income.

Second, the membership of the company must get maintained strictly. The company can only lend loans to its members and accept deposits from them. These companies provide loans at a very low-interest rate but only members can get it.

Nidhi Rule Amendments

The rules for registering these companies have been amended recently. Only a few basic changes have been made to these revised rules. For example, the minimum capital requirement has been increased to 10 lakhs instead of 5 lakhs earlier.

Added to that, a member cannot transfer more than 50 percent of shares against the loan. All members have to maintain a minimum number of shares to stay in the business. All rules other than these small points remain the same in the amendment.

But wait for a minute! Isn’t the process of nidhi company registration quite complex?

If your answer is yes then you need to get an assistant for this task. Many companies are there that can help you with this task. These companies only take a charge from you for the registration. They can guide you through the registration process and answer your queries promptly. They will compile all the details as per the standard procedure.