What is a Nidhi Company?

A Nidhi Company is a company which closely resembles as NBFC as it is one of the most easy and affordable way to start loan business in India. It only requires 7 persons to Form Nidhi Company. 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 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.

Minimum Requirement to Start a Nidhi Company

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.

Rietway Consultants Nidhi Company Package

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

Advantages of Nidhi Company

1. Limited Liability
2. Less Regulations
3. Better Credibility
4. Ease of Fund
5. Micro Banking
6. Better Options for Savings

Documents Required for Nidhi Company Incorporation

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

Nidhi Company Incorporation Procedure

Step -1 Arrange all Required Documents:
The first step is to arrange all the documents and send the same over the 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 Digital Signature and Checking the Name availability.
Step-3 Preparation of Documents:
The Next Step is Preparation of Documents to be Submitted at Department.
Step-4 Filing of Spice Form:
The Next Step is Submission of Spice 32 Form at Department.

Loans Under Nidhi Company

Nidhi Company is becoming so much popular among the business man who wants to start the finance or loan business. The main reason behind this fact is the advantage of Nidhi Company to accept deposit from public and to lend money to public (members) without any RBI approval. The Below Mentioned are the Provisions of Loans Under Nidhi Company:
1. Nidhi Company can lend three types of loans; gold loan property loan, others (LIC, FD etc.).
2. Nidhi Company cannot engage micro finance business but can lend secured loan @20% interest.
3. Nidhi Company can take legal action if any member failed to repay any sum of money.

Deposits Under Nidhi Company

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.

FAQ on Nidhi Company Registration

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 in order to better govern the company in a more transparent manner.

Q2. Can a Nidhi Company do microfinance business?
No, Nidhi Company is not allowed to do microfinance business in India. These are because micro finance is a completely different set of business for an NBFC and require more capital to do the same.

Q3. Does Nidhi Company require any NBFC license from 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 (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 the maximum of 20 times the net owned fund. Net owned fund means the total fund invested by the owner less any accumulated loss.