A Nidhi Company closely resembles an NBFC as it is one of the easiest and most affordable ways to start a loan business in India. Only 7 persons are required to form a Nidhi Company, and the minimum capital requirement for Nidhi Company registration is Rs.5 lakh.
A Nidhi Company is registered to borrow and lend to its members to promote the habit of saving money among its members and works on the principle of mutual help. Unlike an NBFC, a Nidhi Company is not required to obtain a license from the RBI; hence, it is easy to incorporate.
Nidhi Company can open three branches after three years of working within the district. Further, to open any branch outside the district, the company shall require RD approval. Furthermore, the Nidhi Company cannot work outside the state.
Prohibited Activities: Activities like Chit Fund, Hire-Purchase Finance, Leasing Finance, Insurance or Securities Business are strictly prohibited in Nidhi Company
Minimum Capital Requirement: The minimum capital requirement for Nidhi Company registration is Rs . 5 lakh
Minimum Members: It starts with 7 members as a public limited company; however, to obtain a Nidhi Company Status, it needs at least 200 members in a year.
The Services which are included in our package are as Follows:
✅ Digital Signatures of 7 Subscribers
✅ DIN of Directors
✅Filing of Spice form
✅Issue of Incorporation Certificate along with PAN and TAN
✅Memorandum of Association
✅Articles of Association
✅Provisional PF ESI Registration
✅GST Registration
✅MSME Registration
1. Limited Liability
2. Fewer Regulations
3. Better Credibility
4. Ease of Fund
5. Micro Banking
6. Better Options for Savings
1. PAN Card of all Directors and Subscribers
2. Identity Proof, i.e. Voter ID Card/ Driving License/ Aadhar Card/ Passport of all Directors and Subscribers
3. Address Proof, i.e. Bank Statement, Mobile bill, Telephone bill of all Directors and Subscribers
4. Passport Size Photographs of all Directors and Subscribers
5. Current Electric Bill/ Utility Bill as Registered Office Proof
6. Rent Agreement if Applicable
Step -:1 Arrange all Required Documents:
The first step is to arrange all the documents and send them over email / WhatsApp to us. Once all the Documents are Received, we will start the Further Process.
Step -2 DSC and Name Availability:
The Next Step is to start the Further Process of the Digital Signature and check the Name availability.
Step 3: Preparation of Documents:
The Next Step is the Preparation of Documents to be Submitted to the Department.
Step 4: Filing of Spice Form:
The Next Step is the Submission of the Spice 32 Form at the Department.
Nidhi Company is becoming increasingly popular among businessmen who want to start the finance or loan business. The main reason behind this fact is the advantage of Nidhi Company to accept deposits from the public and to lend money to the public (members) without any RBI approval. The following are the Provisions of Loans Under the Nidhi Company:
1. Nidhi Company can lend three types of loans: gold loan, property loan, and others (LIC, FD, etc.).
2. Nidhi Company cannot engage in micro finance business, but can lend secured loans at @20% interest.
3. Nidhi Company can take legal action if any member fails to repay any sum of money.
1. Nidhi Company can accept three types of deposits: Fixed deposit (FD), recurring deposit (RD), & Savings.
2. Nidhi Company can pay interest up to 12.5% on FD & RD and 6% on savings accounts.
3. Nidhi Company can take deposits up to 20 times the funds invested. Invest 5 lakh and accept 1 Cr.
Q1. What do you mean by Nidhi Company rules?
Nidhi Company is not governed by the RBI but by the central government, and hence, the central government has introduced the Nidhi Company Rules 2014 to better govern the company more transparently.
Q2. Can a Nidhi Company do microfinance business?
No, Nidhi Company is not allowed to do microfinance business in India. These are because microfinance is a completely different set of business for an NBFC and requires more capital to do the same.
Q3. Does Nidhi Company require any NBFC license from the RBI?
No, Nidhi Company does not require any RBI license to start the business in India; this is because Nidhi Company has been exempted by the RBI from its core provisions.
Q4. How many branches a Nidhi Company can open?
A Nidhi Company can open up to 3 branches after three years of continuous profit running of the business. Further, these three branches can be opened within the district only. Further, to open any branch outside the district, you will require the Regional Director's (RD) permission. Also, a Nidhi Company cannot open a branch outside the state.
Q5. What is the maximum amount of deposits a Nidhi Company can take?
A Nidhi Company is allowed to take a maximum of 20 times the net owned fund. Net owned fund means the total fund invested by the owner, less any accumulated loss.
