Requirements for Nidhi Company Registration (Nidhi Ltd) in India

Introduction

Nidhi Company is one of the categories of Non-Banking Financial Company (NBFC) that does not require any Reserve Bank license. The Nidhi Company is very easy and cheap to form to register. Hence, this is the main reason as to why the Nidhi Company is so famous between the business communities. Let us discuss the requirements for registering a Nidhi Company in India. But before that, we will classify the requirements into two parts

1. Requirements before registration of Nidhi Company
2. Requirements after registration of Nidhi Company

Let us know discuss both the requirements in detail:

Requirements before registration of Nidhi Company

Nidhi Company is incorporated in the nature of Public Limited Company. Hence, all requirements for the Public limited company will be applicable. There is also a myth in the industry that a Nidhi Limited Company is first incorporated as a Public Limited company, and then registration of Nidhi is initiated.

However, the above statement does not hold true. Nidhi Company is registered from the beginning as a Nidhi limited. There is no separate approval process.

Here is the list of requirements for a Nidhi limited company:

1. Minimum Seven Members: Nidhi Company can be started with seven members. Out of which 3 are also to be appointed as directors. These members can be your relatives.

Also, there is no educational qualification required for any of any member.

2. Documents Required: Documents required can be further classified into two subheads: Documents of Members and Registered Office.

Documents required for Members are as under:

• PAN Card
• Identity Proof - (Voter ID, Passport, Aadhaar Card, DL - Anyone)
• Address Proof - (Bank Statement/Passbook, Electricity Bill, Telephone Bill, Mobile Bill – Any One (Should not be older than two months)
• Passport Size Photograph

Note: Voter Id/Passport/Aadhaar Card/ DL are not accepted as valid address Proof.

Documents required for Registered Office are as under:

• If premises are on rent: Rent Agreement + Utility bill + Signed NOC
• If Premises are owned: Ownership Proof + Utility Bill + Signed NOC

Note: NOC stands for No Objection Certificate: We will provide the format, you just need to sign on plain paper.

Electricity bill, Gas bill, Telephone Bill, Water Bill are served as utility bill for registered office.

3. No Minimum Capital Requirement: This requirement has been officially waived off  by the Ministry of Corporate Affairs (MCA). Earlier, it was used to be INR 5 lakh, but now you can register Nidhi Company with any amount of capital of your choice.

However, we recommend you to start the company with INR 10 lakh, because of 5 of Nidhi Rules, 2014, which mandates you to have INR 10 lakh owned fund invested into the . So, it is recommended to start the Nidhi Company with INR 10 lakh capital.

Requirements after registration of Nidhi Company

Now, we are into the section of requirements which are required to be complied within one year of Incorporation. These requirements are very much important. Otherwise, the company will be at default. The requirements are as follows:

1. Not Less than 200 Members: After incorporation, a Nidhi company must add at least 200 members to comply with this requirement of law. Further, it has to maintain this during the course of time. If the total members falls less than 200 at anytime thereafter, it will leave the company at default.

However, are not able to reach the limit of 200 members, then you must apply for an of time within 30 days of closure of financial year in Form NDH-2 with Regional Director.

2. Net Owned Funds of 10 lakh or more: In a layman language, Net owned funds means amount invested into the business. As already stated, this requirement can be fulfilled by registering the company at INR 10 lakh capital.
    
3. Net owned funds to Deposits should be 1:20: This ratio is very easy to understand. Suppose, if you have net owned funds of 10 lakh, then your total deposit limit would be INR 2 Crore.

Above ratio reflects the upper limit on total deposits.  

Conclusion

We have only discussed the essential requirements above. There are many other compliances and requirements. You can read other articles on Nidhi Company for better understanding, or you can contact us.

Disclaimer

There are lots of articles on the Internet on how to register a Nidhi Company in India. However, most of them are either obsolete or contains the wrong information. Always verify the information from the learned professional.

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