Register Nidhi Company
(Mutual Benefit) India

47,000/- (inclusive of all taxes & fees)

Important Points

  • - Nidhi Company Registration in 20 days
  • - After Company Formation Compliance Support by experts
  • - Work Handled by Top Nidhi Experts

Nidhi Company Registration

Know what is Nidhi Company and how it is registered.

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

For Directors/Shareholders

  • 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

The Total Cost Breakup

Items Qty Price
Digital Signature Certificate (DSC) 7 6,993
Director Identification Number (DIN) 3 1,500
Name Approval 1 1,000
MOA, AOA and Incorporation Fee - 24,000
Stamp Duty of the Respective State - 1,500
PAN and Tan Application - 180
Professional Fee (Inclusive of Taxes) - 11,827
Total Nidhi Company Registration Cost in India 47,000

Note: Stamp duty Extra for States: Punjab, Kerala and Madhya Pradesh.

Time for Nidhi Registration

It takes around 20 days to register a Nidhi Company in India, if all documents are submitted on time.

Interest rates on Loans & Deposits for Nidhi Company

Interest Rates on deposits

There 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 loans

There 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.

Acceptance of Deposits under Nidhi Company

Acceptance of deposits is one of the major feature for Nidhi Company and hence, one must adhere to Nidhi rules so that Nidhi can run smoothly. Here are following important points:

  • Fixed deposits can be accepted for minimum 6 months and maximum 60 months.
  • Recurring deposits can be accepted for minimum 12 months and maximum 60 months.
  • The maximum balance on which interest is given under saving account cannot exceed 1,00,000/-
  • Further following point are also important for repayment of deposits:
  • a) No deposits shall be repaid within 3 months of deposits.
  • b) If deposits are repaid after three months, then he shall not be liable for interest upto 6 months.
  • c) If deposits are repaid before maturity, then interest provided shall be reduced by 2 percent.

Loans under Nidhi Company

Funds lending is another major feature for Nidhi Company and hence, one must adhere to Nidhi rules, 2014 so that Nidhi can run smoothly. Here are following important points:

  • The maximum loans to one person shall not exceed Rs.200,000 if deposits is less than 2 crore.
  • Nidhi Company cannot give any unsecured loan or micro finance loans.
  • The maximum period of gold loan can be 1 year.
  • The repayment period for loan against property cannot exceed 7 years.
  • The maximum gold loan can be 80% of the value of the gold.
  • The maximum loan against property cannot exceed 50% of the value of the property.
  • Nidhi company cannot provide vehicle loans etc.

Mandatory Compliances for Nidhi Company

There are many compliances which are to complied by the Nidhi Company, however the most important compliances are as follows:

NDH - 1

NDH - 1 is filed within 90 days from the date of closure of financial year

NDH - 3

NDH - 3 is filed half yearly, two times in a financial year on sept & march.

SHARES

Membership under Nidhi is dependent on distribution of shares.

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What all a Nidhi Company can do?

A Nidhi can do :

Secured loan, i.e. it can only give loan against certain securities like gold, silver, immovable property etc.

Take deposits in the ratio of 1:20. I.e. if paid up capitals Rs.10 lakh, then max deposits will be 2 crore.

Can offer locker facility and charge fee for the same.

Can open collection centers if all compliances are duly fulfilled.

A Nidhi cannot do :

Unsecured loans, i.e. it cannot extend loan based upon surety, guarantee, ITR based etc.

No Micro finance work can be done under Nidhi Company and no vehicle loans, etc.

A Nidhi cannot pay commission to leverage deposits.

A Nidhi cannot invest in land, in other companies, in stock market etc.

Advantages & Disadvantages of Nidhi Company

Advantages of Nidhi Company

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Can accept deposits

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Less capital required

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Base to establish NBFC

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Best to finance business

Disadvantages of Nidhi Company

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Cannot run micro finance

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More restriction on business

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Cannot invest in any company

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No advertisement allowed

FAQs about Nidhi Limited Company

Q. How many branches can a Nidhi Company open?

A Nidhi Company is not allowed to open any branches before 3 years that too on a condition that profit has been earned by the Nidhi Company in all the three years consecutively. Also, as per law, branches cannot be opened before three years even with any permission. A Nidhi Company is not allowed to open any branches before 3 years that too on a condition that profit has been earned by the Nidhi Company in all the three years consecutively. Also, as per law, branches cannot be opened before three years even with any permission.

Q. What is the maximum interest rate that can be charged by Nidhi Company on loans?

A Nidhi Company can charge 7.5% more than it is paying on deposits. E.g. If Nidhi Company is paying 11% on Fixed Deposits, then maximum interest rate on loan can be charged at 18.5%.

Q. How many persons are needed to incorporate a Nidhi Company in India?

To start with, you need atleast 7 persons to start the Nidhi Company registration. Further, out of seven, three shall also be elected as the directors of the Company. Directors are the person who runs the company.

Q. Can Nidhi Company be registered online without being present in person?

Yes, a Nidhi Company can be registered online without being present in person. It’s a completely online process and hubco.in is a brand in Nidhi Company consultancies.

Q. Can a company, trust become the members in the Nidhi Company?

No body corporate like Private company, public company nor trust can become member of the Nidhi company. This is as per Nidhi Rules, 2014.

Q. What are the important Compliances for Nidhi Company in India?

There are various compliances are to be taken care of like ratio, company law, money laundering etc. Hence, study of all relevant act is important. Further, important compliance as per Nidhi Rules and Companies Act are as follows:

  • File NDH 1 within 60 days from the end of the financial year.
  • File NDH 3 half yearly.
  • Fulfill basic requirements like 200 members, 10 lakh Net owned funds. If not able to comply, then apply for extension in the Form NDH 2.
  • Companies Act compliances like filing of annual returns, Balance sheet etc

Q. How to add members in a Nidhi Company?

Adding a member in a Nidhi Company is the most important task because everything starts from here only. If you are not adding members properly, then all the business you done with the so called members become illegal. Hence, you should know about how to add members in a Nidhi Company.

Q. How much deposit does Nidhi Company can take from the members?

The quantum of deposits depends upon the net owned fund of the Nidhi Company. As per law, it has to maintain the ratio of 1:20. Which means if we have net owned fund (NOF) of Rs.100, I can take deposit of Rs.2000/-.

Q. What are Nidhi Company rules? Is there any RBI Guideline for Nidhi Company in India?

Nidhi Company is the type of Non-Banking Financial Company (NBFC) which has been exempted from the Reserve Bank of India (RBI) provisions, and hence no RBI guideline is applicable to the Nidhi Company. Further, Nidhi Companies are governed by the Nidhi Rules, 2014.

Q. What is the maximum interest rate a Nidhi Company can offer on deposits?

The maximum interest rate a Nidhi Company can offer on deposits must equal to the rate of interest offered by NBFC which is currently 11.00%. Further, in case of saving account, the maximum Interest rate can be 2% more than a nationalized bank is offering.

Q. What is the total time taken to register Nidhi Company in India?

Hubco.in is committed for a faster registration of the Nidhi Companies. It takes around 15 to 20 days to register the Nidhi Company in India.

Q. Is Nidhi Company require any Reserve bank (RBI) license to register?

No, Nidhi Company does not require any license from the Reserve Bank of India (RBI), nor it is bound by any regulation of the Reserve Bank of India. RBI has specifically exempted the Nidhi Companies from its core provisions. It is regulated by Ministry of Corporate Affairs (MCA) by Nidhi Rules, 2014.

Q. Any checklist for Incorporation of Nidhi Company?

If you are planning to register a Nidhi Company in India, then you must know the following checklist:

  • Must be familiar with how the Nidhi Company works
  • You should know about the documentation involved.
  • How to make members in the Nidhi Company.
  • You should be aware about the branches of the Nidhi Company.
  • Nidhi Software to be used.

Q. Which are the top Nidhi Companies in India currently?

Nidhi Companies becomes best when the deposit size increases. It’s a bulk game, whosoever gets more business automatically becomes the best. The top Nidhi Companies currently in India are:

  • Maben Nidhi Limited
  • Muthoottu Nidhi (Kerala) Limited
  • Mini Muthoottu Nidhi Kerala Limited
  • Kalayil Nancy Nidhi Limited

Q. Where can I register Nidhi Company in India? Can we register Nidhi Company in Kerala?

The Nidhi Company registration procedure is completely online in India and can be incorporated anywhere in India. Further, as per recent reports from MCA, it has been observed that Nidhi Companies are very famous among the southern states including Kerala, Karnataka, Tamil Nadu and further in some parts of Uttar Pradesh (UP) and Bihar.

Hubco.in provides the Nidhi Company registration services all over the India including Kerala, Bihar, Uttar Pradesh etc.

Q. Is there any Nidhi Company full form? What is mutual benefit Company?

No, there is no full form of Nidhi Company, as it is in itself is a full form. If any Nidhi Company is incorporated, its name structure be like ABC Nidhi Limited.

Mutual benefit Company is another name for Nidhi Company. Earlier, companies were registered as Nidhi Company can use the words Mutual Benefit as well. However, now Mutual benefits are not used only Nidhi Limited is used.

Q. What is the difference between Nidhi Company and Chit fund Company?

Chit Fund Company is also known as the committee where fixed instalment is paid by the members over a definite period of time.

Nidhi Company is an NBFC which can take a deposit and lend money to its members. Hence, Nidhi Company is very different from the Chit Fund Companies.

Q. Can Nidhi Company open branch outside the state of registration?

No, a Nidhi company cannot open branch outside the state in any case.

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Register Nidhi Company in India