The Nidhi Company Business is trending in the Indian financial market these days. Nidhi Company Registration is a less complex procedure when compared to other types of financial companies such as NBFCs. Let us see how we can register a Nidhi Company simply.

What are the eligibility criteria for Nidhi Company Registration Online?

To be eligible for Nidhi Company Registration Online, a Nidhi Company must meet the below-mentioned criteria within 1 year of incorporation-

  • It should be able to add at least 200 shareholders. But, the shareholders should not include any corporate, minor, or body 
  • It should have a minimum Net Owned Fund (NOF) of Rs 10 Lakhs. Also, at least 10% of its outstanding deposits should comprise of un-encumbered term deposits.
  • It should suffix the words ‘Nidhi Limited’ in its name.
  • 3 of its members should be designated as directors 
  • The company must have a registered office anywhere in India.
  • The prescribed NOF to deposits ratio is 1:20.

What are the documentation criteria for Nidhi Company Registration? 

To complete the registration formalities, a Nidhi Company should furnish the below-mentioned documents-

  • Identity proof of its directors and shareholders– Copies of PAN cards for Indian nationals and passport (attested) for foreign nationals( if any)
  • Residential proof of its directors and shareholders- Copies of passport/bank statement/ driving license /electricity bill/ Aadhar card. 
  • Incorporation documents- Signed documents of digital signature application and soft copies of other incorporation documents (signed).
  • Proof of registered office- Copies of sale deed/rental agreement, electricity bill, property tax receipt, or NoC from landlord to utilize his premise as an office.

What is the procedure of  Nidhi Company Registration in India? 

The step-by-step procedure of Nidhi company registration online is mentioned below-

STEP 1: Application for Director Identification Number (DIN)

A minimum of 7 Members and 3 Directors are required to start the Incorporation process of a Nidhi Company in India. As per Sections 266A to 266G of Companies (Amendment) Act, 2006, all the existing and intending directors of any company have to obtain DIN within the prescribed time-frame as notified.

STEP 2: Application for Digital Signatures (DSC)

This is one of the major steps of the Nidhi Company Registration process. DSC is a pen drive-based signature used to sign on digital documents. All the directors/shareholders of the Nidhi Company must have their own DSCs. 

Step 3: Application for name reservation and approval

After obtaining the DSC and DIN, you should file the application INC-1 with the MCA (Ministry of Corporate Affairs). You need to suggest at least 3 names while applying for name approval with the MCA. Please make sure that the proposed names are unique. Also, the name should conform to the Company Incorporation Rule 8.

STEP 4: Document preparation

Once the MCA approves the name of your company, you need to prepare the necessary documents (to know about the documentation criteria, please refer to the previous section). At this step, you need to prepare the Memorandum of Association (MoA) and Article of Association (AoA). The following forms are needed to be filled and signed as well- 

  1. INC 9 – To be filed by all the subscribers to the MoA
  2. DIR 2 – To be filed by all the directors of the company. A declaration as per rule 5 and 6 of Nidhi rules 2014 also need to be signed by all the subscribers

STEP 5: Filing for registration

Once the documents are duly signed, the next step is to file for incorporation with SPICE Form INC 32. 

To further ease the company incorporation process, the MCA has issued an integrated incorporation form INC-32. Therefore, a Company can now be incorporated online by filling the SPICe (Simplified Proforma for Incorporating Company Electronically) form in Form INC-32 (using the Digital Signature Certificate of the Director) along with the eMoA in Form INC-33 and eAoA  in Form INC-34.

STEP 6:  Document Verification  

After successful submission of the documents, the Authority will verify your credentials. They will revert, in case any discrepancy is found. 

STEP 7:  issuance of the Nidhi Company Registration certificate

On being satisfied with your credentials, the Government will issue the Nidhi Company Registration certificate. The entire registration process usually takes about 45 days for completion. 

Nidhi Company is widely preferred by small financers these days as it’s a much better option as compared to the Credit Co-operative Societies. A Nidhi Company is easier to register and one can also enjoy all the benefits attached to a co-operative society. Also, the cost of Nidhi Company Registration is less as compared to other types of NBFCs