What is a Nidhi Company?
A Nidhi Company is a public limited company which is formed with a sole purpose of accepting deposit and lending money only to its members. It is also an Non Banking Financial Company (NBFC) which has been exempted from the provisions of RBI.
How to register Nidhi Company in India?
Registering a Nidhi Company is a big thing because it something which no ordinary person can start. Starting with Nidhi can gradually upgrades you to NBFC and later on to Bank. Three broad heads for registration are as follows:
# Prepare DSC and DIN: The first step is to prepare Digital Signatures (DSC) and Director Identification Number (DIN). Further, make sure to apply DSC for subscribers as well to complete the procedure under the form SPIC and to e-file eMOA.
# File for Name Approval: After applying for DSC and DIN, the next step is to file for Name Approval. One can file for Name approval under Form INC 1 or one can file with incorporation under Spice Form.
# File for Incorporation: Once your name is approved, you can file for incorporation through Spice Registration forms.
Documents required for Nidhi Company Registration
- Copy of PAN Card
- Aadhar Card
- Address Proof (Bank Statement, Mobile bill, Telephone bill)
- Passport Size Photo
For Registered Office
- Ownership Proof (Electricity bill etc)
- Utility Bill (Gas bill, Electricity bill)
- NOC (Download format)
Nidhi Company Registration Process
Nidhi Company registration process requires you to comply with the Nidhi company rules other the application may be rejected by the authority. Further, the registration process may be divided into 3 steps:
# Step 1 – Prepare DSC & DIN: The first step is to file for Digital Signatures (DSC) and Director Identification Number (DIN). It takes around one day to get the digital signatures and generally DIN can be filed on the same day.
# Step 2 – File Name Approval: The second step is to file the name approval via form INC – 1 and at-most you can give maximum 6 names for approval, The name must start with a unique word and must end with “Nidhi Limited”.
# Step 3 – File for incorporation: The third step is to file the incorporation along with all necessary documents via form INC 32. The form is attached with all the important attachments like MOA, AOA, declarations etc.
Time & Cost for Nidhi Company Registration
|Digital Signature Certificate (DSC)||7||7,000|
|Director Identification Number (DIN)||3||1,500|
|MOA, AOA and Incorporation Fee||–||24,000|
|Stamp Duty of the Respective State||–||1,500|
|PAN and Tan Application||–||500|
|Professional Fee (Inclusive of Taxes)||–||11,500|
|Total Nidhi Company Registration Cost in India||47,000|
Time for Nidhi RegistrationIt takes around 20 days to register a Nidhi Company in India, if all documents are submitted on time.
Note: Stamp duty Extra for States: Punjab, Kerala and Madhya Pradesh.
Interest rates on Loans & Deposits for Nidhi Company
Interest Rates on depositsThere are basically three types of deposits on which interest is provided which are as follows:
- # Fixed deposits (FD): Maximum rate should not exceed rate provided by NBFC which is currently is 12.5%.
- # Recurring deposit (RD): Maximum rate should not exceed rate provided by NBFC which is currently is 12.5%.
- # Saving Account: Maximum rate on saving account is 2% plus rate provided by nationalized bank on saving a/c. E.g. SBI rate is 4% then max rate will be 6%.
Interest Rates on loansThere are basically three types of loans which are provided by Nidhi which are as follows
- # Gold/Silver loan: The maximum rate should be 7.5% plus max rate given on deposits. E.g. 7.5% + 12.5% = 20%.
- # Loan against property: The maximum rate should be 7.5% plus max rate given on deposits. E.g. 7.5% + 12.5% = 20%
- # Other Loans (Includes against FD): The maximum rate should be 7.5% plus max rate given on deposits. E.g. 7.5% + 12.5% = 20%
Mandatory Requirements for Nidhi Company
It requires seven people to start the Nidhi Company in India. Further, the initial capital required for Nidhi Company registration is Rs.5 lakh.However, company needs to abide by four important compliances:
- Net Owned fund to Deposit should not exceed 1:20.
- 200 Members should have been added by the company within one year.
- Rs.10 lakh capital should be raised by the end of first year.
- Company should keep at least 10% in the fixed deposit in any scheduled commercial bank.