NIDHI limited company belongs to the Non-financial banking business structure. Such a type of company deals with deposits and lending within its members and works only for the mutual benefits of its shareholders. NIDHI means ‘treasure’ these types of companies are registered for cultivating the habit of thrift.
Nidhi ltd companies are registered under section 406 of the Companies Act 2013. This class of NBFC is regulated by the ministry of corporate affairs and monitored by RBI. However, Nidhi companies are exempted from the provisions of the RBI Act as there is no involvement of public funds. But other directions are applicable.
If you are planning to commence a finance institution without much capital a Nidhi limited company is the best option. Know all about the documents required process involved in Nidhi limited company registration and register your Nidhi company with Taxpotter.
NIDHI is the full form for the National Initiative for Developing and Harnessing. It is registered as a public limited company and has ‘Nidhi limited’ as the last word of the name. This is a non-financial banking structure (NBFC) created to cultivate the habits of thrift and savings among its members and lending to its members for their mutual benefits
Nidhi companies are restricted from the following activities
Ease of formation : Starting a Nidhi ltd company is very simple and easy as compared to other types of businesses.
Limited liability : According to the Companies Act, the members and directors enjoy limited liability features. That means if any losses occur or the company goes through financial trauma the creditor banks and government cannot seize the personal assets of the members
Perpetual succession : In case of death or departure of any members will not affect the company as it has perpetual existence. The company will continue until it is dissolved legally.
Ease of management : The activities of a Nidhi company are controlled by the board of management. The board of management can be changed easily by filing a form with the ROC.
Borrowing at a cheaper rate : Being a member of a company one can borrow money at lower rates as compared to the banks.
Fewer complications : It is less complicated than the banks to borrow and lend money to known persons.
Fewer guidelines : The Nidhi companies have to follow fewer guidelines imposed by RBI.
NDH-1 : In this form, A Nidhi limited company has to give the list of its members within 90 days of the end of every financial year.
NDH-2 : in this form, the company can make a request to MCA for an extension, in case it has been failed to add 200 members in its first financial year.
NDH-3 : besides the above-mentioned forms the company has to file half-yearly returns in this form
Annual returns with ROC : Nidhi ltd company must file an annual return with the MCA through the form MGT-7.
Profit, loss and balance statement : A Nidhi ltd company has to submit the financial statements and other documents in AOC-4 from
Income tax returns : Like other companies, a Nidhi company must file annual returns in the following financial year.
Even though the registration process of Nidhi Company is quite simple, you must take help from professionals.
INC 9 – it is filed by all the subscribers of MOA
DIR 2 – it is filed by all the directors and signed by all the subscribers, as per the Nidhi rules
Step 1 - Appling DIN and DSC for all the directors of the company
Step 2 - Selecting a unique name and get approval from MCA
Step 3 - Drafting and filing of MOA and AOA to the registrar of companies along with subscription statement
Step 4 - Getting the certificate of incorporation. It contains the identification number of the company
Step 5 - Applying for PAN, TAN for the company
Step 6 - Opening a bank account by submitting the MOA, AOA, PAN, and incorporation certificate of the company.