Nidhi Company Registration

Nidhi Company Registration is a process that enables entrepreneurs to set up and run their own business. It provides the legal framework to ensure that the company is operating in compliance with applicable laws and regulations. The process involves filing of various documents with the Registrar of Companies, obtaining a certificate of incorporation, and registering for taxes. All these steps are necessary for successful company incorporation and operations. With Nidhi Company Registration, entrepreneurs can easily register their companies without any hassle or stress. This will enable them to focus on running their businesses rather than worrying about legal formalities.

Minimum number of members : Nidhi companies must have at least 200 members within a year of incorporation.

Minimum net owned funds : The minimum net owned funds required to register a Nidhi company is Rs. 10 lakhs.

Use of the word 'Nidhi' : The name of the company must include the word 'Nidhi' in its name.

Limited operations : Nidhi companies can only operate within the district where they are registered, and they cannot open branches outside the district.

Lending restrictions : Nidhi companies cannot lend money to non-members or engage in any other form of business activity other than borrowing and lending with its members.\

Deposits limits : The maximum limit of deposits that can be accepted from members by a Nidhi company is Rs. 20,000.

Prior approval required : Prior approval from the Registrar of Companies (ROC) is required before the company can start accepting deposits.

It is essential to comply with all the rules and regulations laid down by the Ministry of Corporate Affairs (MCA) and the Reserve Bank of India (RBI) for the registration and operation of Nidhi companies in India. Failure to comply with these rules may lead to penalties and legal action against the company and its directors.
Post incorporation of the Limited Company, within a period of one year from the commencement, the Nidhi Company must meet all of the following criteria:

  • Not have less than two hundred members (shareholders);
  • Have Net Owned Funds (NOF) of ten lakh rupees or more;
  • Have creative term deposits of not less than ten per cent of the outstanding deposits; and
  • Have a ratio of Net Owned Funds to deposits of not more than 1:20.

“Net Owned Funds” means the aggregate of paid-up equity share capital and free reserves as reduced by accumulated losses and intangible assets appearing in the last audited balance sheet.

If the Nidhi Company satisfies the above conditions required for operating as a Nidhi Company, the company shall within ninety days from the close of the first financial year after its incorporation and where applicable, the second financial year, file a return of statutory compliances in Form NDH-1 duly certified by a practising CS/CA/CWA along with the requisite fees.

In the case at the end one year from commencement the Nidhi Company is not able to meet the above requirement, the Company may within thirty days from the close of the first financial year, apply to the Regional Director in Form NDH-2 for extension of time.

If even after the second financial year the Nidhi Company is not able to meet the requirements for a Nidhi Company, then the Nidhi Company shall not accept any further deposits from the commencement of the second financial year till it complies with the provisions for operating as a Nidhi Company and be liable for penal consequences.

 
     
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