Setting up a Nidhi Company in India with the assistance of CRUISE CORPORATE CONSULTANCY SERVICES Pvt. Ltd. (CCCS) is relatively straightforward but requires careful adherence to specific regulations under the Companies Act, 2013. Nidhi Companies are unique types of non-banking finance companies (NBFCs), and their primary purpose is to cultivate the habit of saving among members and to offer loans to its members at reasonable rates. Here’s a step-by-step guide on how to establish a Nidhi Company in India.
Understanding Nidhi Company Requirements
- Nidhi Company Nature: It is a member-based company, meaning it operates for the mutual benefit of its members only.
- Non-Banking Financial Company (NBFC): It falls under the category of NBFCs but does not require an RBI license, as they are governed by the Ministry of Corporate Affairs (MCA).
- Minimum Members and Capital: Initially, it must have at least 7 members and a minimum paid-up equity capital of ₹10 lakh.
Pre-Registration Requirements
- Minimum Directors: A Nidhi Company must have at least 3 directors.
- Members: It must have a minimum of 200 members within one year from the date of incorporation.
- Net Owned Funds (NOF): The company must ensure it has at least ₹10 lakh in NOF.
Documentation for Nidhi Company Registration
- PAN and Identification Proofs: PAN cards and Aadhaar cards of all directors and shareholders.
- Registered Office Proof: Proof of address of the company’s registered office, along with a NOC from the owner.
- Digital Signature Certificate (DSC): Required for filing digital forms with the Ministry of Corporate Affairs.
- Director Identification Number (DIN): Required for all directors and can be obtained along with the incorporation.
Registration Process
- Obtain DSC and DIN: This is necessary for all directors and is usually done as the first step.
- Name Approval: File the RUN (Reserve Unique Name) form with the MCA to reserve the company’s name.
- File Incorporation Forms: Use the SPICe (Simplified Proforma for Incorporating Company Electronically) form for incorporation, including details of directors, shareholders, and address.
- Submission of MOA and AOA: The Memorandum of Association and Articles of Association should include details on the objectives and rules of the Nidhi Company.
Post-Incorporation Compliance
- File Form NDH-1: Within 90 days from the close of the first financial year, the company must submit Form NDH-1 (return of statutory compliances).
- Meeting Compliance Requirements: Must have at least 200 members and maintain the NOF-to-deposit ratio of 1:20.
- Quarterly Returns (NDH-3): File Form NDH-3 within 30 days from the end of each quarter.
- Annual Returns and Financial Statements: File annual returns with the MCA in Forms MGT-7 and AOC-4.
Restrictions and Compliance for Nidhi Companies
- Loan and Deposit Regulations: Loans are provided only to members and should not exceed the specified limits (based on deposits).
- Investment Rules: Nidhi Companies cannot issue preference shares or advertise for deposits.
- Unsecured Loans and Interest Rates: Loans must be unsecured, and interest rates on loans should be fair and transparent.
Benefits of a Nidhi Company
No RBI License Needed: Operates under MCA guidelines rather than RBI regulations.
Encourages Savings: Promotes a culture of savings among members.
Tax Benefits: A lower tax rate may be applied, as Nidhi companies are classified under mutual benefit companies.
Setting up a Nidhi Company in India can be an efficient way to offer credit services to a community or group, promoting savings and financial inclusion with the professional support of CRUISE CORPORATE CONSULTANCY SERVICES Pvt. Ltd. (CCCS).
