Nidhi Limited Company

A Nidhi Company is a type of Non Banking Financial Company registered under the Companies Act and formed with the object of cultivating the habit of savings in its members. It accepts deposits and provides loans to its members only.

A Nidhi Company cannot carry out business in the following areas - chit funds, hire-purchase finance, leasing finance, insurance or securities business. The company is allowed to accept deposits from or lend funds to its members only. Also, it can’t advertise itself to ask for any deposits.

The following two forms have to be filed for the registration of a Nidhi Company - INC 9–This form must be filed by all the subscribers to MOA DIR 2 – This form has to be filed by all the directors of the company, also to be signed by all the subscribers.

Form AOC -4 and form MGT -7 have to be filed by a Nidhi Company every financial year. Form AOC-4: Filing of Financial Statements Nidhi Company has to file its financial statements, a notice convening the General Assembly, the reports of its Directors, the audit reports, and the ROC balance sheet within 30 days from the date of the Company’s Annual General Meeting. Form MGT-7: Annual Return The Nidhi company shall send its annual return along with the list of company members within 60 days of the Annual General Meeting.

NDH-1 Form: In this form, a Nidhi Company must submit the list of members within 90 days at the end of every financial year. NDH-2 Form: The company can request MCA for an extension in this Form, if it has not been able to add 200 members in its first financial year. NDH-3 Form: In this form a half-yearly return is required to be filed. Annual Returns with ROC: The Nidhi Company has to file its Annual Returns with MCA through Form MGT-7. Profit & Loss Statement and Balance sheet: In form AOC-4, the financial statements and other related documents are to be submitted every year. Income Tax Returns: Nidhi Company must file its Annual Income Tax Returns by 30th September of the following financial year.

Any individual who wishes to be appointed as a Director in any Company or Designated Partner in an LLP must file an application in form DIR-3 with MCA for allotment of Director Identification Number (DIN). It must be noted that an individual can’t have more than 1 DIN as Director Identification Number (DIN) is a unique number allotted by the Ministry of Corporate Affairs to an individual.

Paid-up share capital refers to the actual amount raised by a company i.e.; amount paid by the shareholders on the issuance of shares. While authorised share capital can be defined as the maximum amount of share capital that a company can raise by way of issuance of shares at present or in the future. It is also possible to increase the authorised share capital to raise more paid-up share capital by way of issuance of shares. Anyone can register a company in India by any amount of paid-up share capital not exceeding the amount of authorized share capital. It must be noted that the amount of paid-up share capital can be less or equal to the authorized share capital but can’t be more than the amount of authorised share capital in any case.

No, a Nidhi Company registration process is completely online. So, none of the promoters/directors are required to visit physically at any place. All required documents & information can be sent through e-mail or uploaded on our portal for filing. We only require self-attested scanned copies of all documents & relevant information along with your authorisation to submit an application before authority on your behalf. All the forms are filed online on the MCA web portal, application & documents are digitally signed & submitted before the authority for approval.

Since a Nidhi company is registered as a Public Limited Company, the registration process is similar and the following things are required: • Minimum 3 directors & 7 shareholders/members are required to be appointed, out of which one must be a resident of India. It should be noted here that an individual can become shareholder and director at the same time. • A place of business in India must be provided as a registered office address. • KYC documents such as copy of PAN card & Aadhaar card of Directors/Shareholders • E-mail ID & Mobile number for Directors/Shareholders

The following conditions have to be fulfilled within one year of registration for getting a status as Nidhi Company • It should have a minimum 200 members. • The net owned funds should be Rupees 10 lakh rupees. Net owned funds = Equity share capital + free reserves (-) accumulated losses (-) intangible assets • Unencumbered term deposits must be 10% or higher of the outstanding deposits • The ratio of net owned funds to deposits must not be more than 1:20 If Nidhi Company fulfils all above conditions, it should file NDH-1 along with the stipulated fees within 90 days from the end of the first financial year after incorporation. The form must be duly certified by practicing CA/ CS/ CWA. An extension of one more financial year can be granted upon submitting NDH-2 to the Regional Director within 30 days from the end of the first financial year. If after the second financial year, it doesn’t complete the requirements, the Nidhi Company cannot accept deposits till it complies with the provisions. A penalty will be imposed as well.

The following documents need to be submitted to register a Nidhi Company • Proof of the registered place of business (Ownership documents/ rent or lease agreement) • No Objection Certificate (signed by the owner/ landlord) • Identity proofs (Aadhar card/ Voter ID/Passport) • Address proofs of the members • Passport photos of the members • PAN card copies of the members • Digital Signature (DSC) • Director Identification Number (DIN) of the directors • Memorandum of Association of the company (MOA) • Articles of Association of the company (AOA) Only one object will be mentioned in MOA of the company: “cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.”

Yes, a Nidhi company cannot accept deposits of more than 20 times of its Net Owned Funds (NOF) as per its last audited financial statement.

Any individual who is an Indian resident can become a member of Nidhi Company. He/she must have attended the age of 18 years or above to be eligible to form a Nidhi Company.

Any individual above the age of 18 years can be appointed as director in the company after getting the Digital Signature Certificate (DSC) & Director Identification Number (DIN). Even a foreign national can also become a director in a Nidhi company; as such there is no specific criteria prescribed in terms of his/her citizenship or residency. Now-a-days DIN gets allotted at the time of company registration subject to a limit of maximum 3 DIN. For obtaining more than 3 DIN, an application can be filed separately in form DIR-3 with MCA.

Yes, it is possible to use a residential address for a Nidhi company registration to receive official communication from authorities such as MCA, Income Tax, GST department etc.

Yes, Stamp duty charges are imposed by the state in which the registered office of the company is proposed to be located. The charges are on MOA, AOA & application form. Our charges are covered under the plan for all the states except Kerala, Punjab & Madhya Pradesh. Our experts will guide you on additional charges applicable if any for Kerala, Punjab & Madhya Pradesh.