Nidhi company registration?
Nidhi companies are formed under the company’s act, 2013 whose primary objective is to accept deposits and lending money to its members only, against mortgage of jewels, gold, property etc. For over centuries local affluent persons like lawyers, auditors, and retired persons have been doing business of lending and accepting deposits in their local area for cultivating the habit of thrift but the area of operation has been limited to local panchayats and municipalities only. With the introduction of Nidhi Company a person can start banking business for a relatively small number of people without going through strict formalities required for incorporation of Non-Banking Financial Company (NBFC) or a Banking company.
NIDHI companies are effectively non-banking financial companies and are engaged in the business of accepting deposits and making loans to their members. The recent failures in the NBFC sector also extended to the NIDHI companies compelling the Government to introduce strict prudential norms for such companies. The deposit-taking activities of NIDHIs are governed by the RBI Act and guidelines made thereunder.
What is the NIDHI company registration process?
For incorporation, the normal procedure for incorporating a public company is required to be complied with, such as obtaining availability of name, filing of Memorandum and Articles of Association and other related documents. For details on registration click here.
What are the general restrictions or prohibitions for Nidhi company?
A Nidhi company shall not
- carry on the business of chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by any body corporate;
- issue preference shares, debentures or any other debt instrument by any name or in any form whatsoever;
- open any current account with its members;
- acquire another company by purchase of securities or control the composition of the Board of Directors of any other company in any manner whatsoever or enter into any arrangement for the change of its management, unless it has passed a special resolution in its general meeting and also obtained the previous approval of the Regional Director having jurisdiction over such Nidhi;
- carry on any business other than the business of borrowing or lending in its own name. Nidhis which have adhered to all the provisions of these rules may provide locker facilities on rent to its members subject to the rental income from such facilities not exceeding twenty per cent of the gross income of the Nidhi at any point of time during a financial year.
- accept deposits from or lend to any person, other than its members;
- pledge any of the assets lodged by its members as security;
- take deposits from or lend money to any body corporate;
- enter into any partnership arrangement in its borrowing or lending activities;
- issue or cause to be issued any advertisement in any form for soliciting deposit. It may be noted that private circulation of the details of fixed deposit Schemes among the members of the Nidhi carrying the words "for private circulation to members only" shall not be considered to be an advertisement for soliciting deposits.
- pay any brokerage or incentive for mobilizing deposits from members or for the deployment of funds or for granting loans.
How can a Nidhi company give loan to its members?
The loans given by a Nidhi to a member shall be subject to the following limits, namely:–
- two lakh rupees, where the total amount of deposits of such Nidhi from its members is less than two crore rupees;
- seven lakh fifty thousand rupees, where the total amount of deposits of such Nidhi from its members is more than two crore rupees but less than twenty crore rupees;
- twelve lakh rupees, where the total amount of deposits of such Nidhi from its members is more than twenty crore rupees but less than fifty crore rupees; and
- fifteen lakh rupees, where the total amount of deposits of such Nidhi from its members is more than fifty crore rupees:
How can a member take a loan from a Nidhi company?
A Nidhi shall give loans to its members only against the following securities, namely:–
- gold, silver and jewellery, and the repayment period of such loan shall not exceed one year.
- immovable property and, the total loans against immovable property [excluding mortgage loans granted on the security of the property by a registered mortgage, being a registered mortgage under section 69 of the Transfer of Property Act, 1882 (IV of 1882)] shall not exceed fifty per cent of the overall loan outstanding on the date of approval by the board, the individual loan shall not exceed fifty per cent of the value of the property offered as security and the period of repayment of such loan shall not exceed seven years.
- fixed deposit receipts, National Savings Certificates, other Government Securities and insurance policies.
What are the rates of interest charged by a Nidhi company?
The rate of interest to be charged on any loan given by a Nidhi shall not exceed seven and half per cent above the highest rate of interest offered on deposits by Nidhi and shall be calculated on reducing balance method.
Nidhi shall charge the same rate of interest on the borrowers in respect of the same class of loans and the rates of interest of all classes of loans shall be prominently displayed on the notice board at the registered office and each branch office of Nidhi.
What's in it for you?
Our package includes-
- Seven class-3 Digital signatures(Signing).
- Five Director identification numbers.
- Incorporation certificate.
- One RUN approval(Name approval).
- Incorporation fees and stamp duty.
- PF registration.
- ESI registration.
- PAN and Tan
- Professional tax(Maharashtra)
- Memorandum of association.
- Articles of association
- Free GST registration
- MSME registration
After incorporation also, we will assist in further activities like
- Free consultation and meetings for understanding the scope of work.
- Updates on various regulations and compliances.
- Assisting in opening a current account.
- A dedicated manager for clearing your doubts.
Why CharteredMunshi
We value all our customers and attempt to offer our services as though they were our 'first client'. We ensure that the process is fast and smooth. Unlike others, we do not outsource our work and offer in house services coming through our specialists who are experts in their respective fields. We will assign you a dedicated manager who will support you from the start to end of the process and address any queries that you might have.