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Nidhi Company Registration

Section 8 Company to be Incorporated under Companies Act, 2013

A) Introduction of Producer Company

A Nidhi Company is a kind of Non-Banking Financial Company (NBFC). Nidhi Companies are formed to borrow and lend money to its members. It is dependent on the principle of mutual benefit and instils the habit of saving among its members. These companies are more operative in the southern part of India.
Nidhi means “Treasure”, Nidhi company means which has been purely incorporated as a Nidhi. The rules and regulations of Nidhi company were prescribed by the central government with the object of cultivating the habit of thrift and savings, receiving, and lending amongst its members for mutual benefit.
Nidhi Companies, regulated under the Nidhi Rules, 2014, are non-banking financial entities recognized under Section 406 of the Companies Act, 2013. Their primary objective is to facilitate the acceptance of deposits and lending funds to their members, fostering a culture of thrift and savings within their communities
A Chit Fund is also known as a committee where a fixed instalment is paid by the members, which means some people contribute set money for a decided period, while a Nidhi Company is an NBFC, the members can deposit some amount of money or recurring deposit and lend money.

B) Benefits of Incorporation of Nidhi Company

Branches

Upto 3 branches can be open within the same district, if it earned Net profit in the preceding 3 financial years. For branches outside the district it needs permission from the Regional director.
Dividend upto 25%

Nidhi company can declare a dividend amount upto 25% without any permission or approval from the Regional director.
Loans to Members

Eligible to provide loans to its members. The loan amount will be given in accordance with the total deposit amount from members.
Benefits to the Members

The Nidhi Company strives to help its members save more money.
Making gifts and obtaining loans from the business for its members is quite simple.
Members are encouraged to save more since loans are provided at a rate that is lower than the market rate.
The Nidhi Company’s net owned fund ratio is 1:20. That indicates that for every rupee you invest, you will receive a 20 rupee deposit.
The Nihi Company offers protected investments. When compared to other finance firms, the risk of loan default is lower.

C). Documents required for Incorporation of Section 8 Company

ID Proof

Aadhar / Voter ID / Driving licence / Passport/any other foreign identity proof (in case of foreigner)Directors and Shareholders.

Address Proof and Utility Bill

The Address proof of the Directors, shareholders along with the Proof of the registered place of business (Ownership documents/ rent or lease agreement) or any bill in relation to electricity /landlord bill / bank statement.

Photos

The photos of the respective Directors , shareholders and designated authorities should submit for the clarification and proof of the concerned person.

PAN

A photo copy of the respective Directors and shareholders.

DSC

Digital signature is the electronic signature format of the Directors / signatory authority for the purpose of e-filing with the Register of Companies.

NOC (Owner/Landlord)

No objection certificate by the owner / landlord must be enclosed.

Additional Documents

In case of any Non Resident Indian (NRI) or Foreign National Directors the relevant documents must be notarized and apostilled for certifying documents.

DIN

Directors’ Director Identification Numbers (DINs)

MOA

Company’s Memorandum of Association (MoA)

AOA

Company’s Articles of Association (AoA)

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