A nidhi company is a company which has core operations of lending and borrowing money among its members. It is formed by members of a specific community for their mutual benefits.
Nidhi Company registration is governed under section 406 of Company Act 2013. The entrepreneurs are required to file application in Ministry of Corporate Affairs and RBI for approval. Nidhi company is required to follow Nidhi Rules, 2014 to maintain its legal stature.
Below are the guidelines specified in Company Act 2013 for Nidhi company registration.
Provisions for Nidhi Company Incorporation
- A nidhi company is incorporated as a public limited company with minimum capital of 5 lakhs.
- Every nidhi company shall have “Nidhi Limited” as last name.
- The respective point is required for approval by MCA.
- No company or trust or minor can be a member in nidhi company.
- The director is required to be a member of Nidhi Company.
Mandatory Documents for Nidhi Company Incorporation
- INC 9 for all subscribers
- DIR 2 for all directors
- Declaration as per rule 5 & 6 of nidhi rules 2014
Return Filings Required by Nidhi Company
- Form NDH 1 which should be certified by a CA within 90 days of first financial year.
- Form NDH 3 which should be certified by CA within 30 days of each half year.
Provisions related to Share Capital of Nidhi Company
- No preference shares can be issued in a Nidhi company.
- Nidhi must issue equity shares of value not less than 10 rupees.
- Nidhi company must have at least 200 members.
Provisions regarding deposits under Nidhi Company
- Nidhi companies can accept FDs for a period of six to sixty months and recurring deposits for a period of twelve to sixty months.
- Nidhi company can pay interest on deposits but not exceeding the RBI guidelines.
- Nidhi company can’t accept deposits exceeding twenty times of its net owned funds.
- A minor can have deposits in Nidhi company if they have guardian who is member of nbfc.
Auditor’s Report after Nidhi Company Registration
The Nidhi Company is required to submit the annual audit report to show that the company has compiled with all the statutory rules and regulations.
These are the important nidhi company guidelines as per company act 2013. A Nidhi company must run and operate according to the specified rules and regulations.