Have Queries? Talk to CCL Experts
You think lady’s kitty is all about fun, games, chit-chats and gossips? Well, this is not the case. With the idea of this they have cultivated a habit of saving among its members. Same is being done by Nidhi Company Registration but in more organized & legalized way. One of the simple and easy option to start a borrowing and lending business in India without obtaining RBI approval is Formation of Nidhi Company, Such Nidhi Company Incorporation accepts deposits and provide loans only to their members, it is prohibited from dealing with non-members. Know more about Registration of Nidhi Company here and if you have any question, book a consultation with our Nidhi Company Experts at Compliance Calendar LLP.
Definition: -
Nidhi means a Company which has been incorporated as a Nidhi:
“Nidhi” or “Mutual Benefit Society” means a company, which the Central Government may by notification in the Official Gazette, declare to be a Nidhi or Mutual Benefit Society, as the case may be. A Nidhi company is a type of company in the Indian non-banking finance sector, recognized under section 406 of the Companies Act, 2013 & their core business is borrowing and lending money between their members. They are also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. Along with Companies Act, 2013, these companies are regulated under the Nidhi Rules, 2014 issued by the Ministry of Corporate affairs.
GOVERNING LAWS:
The primary object of Nidhi Company is to carry on the business of accepting deposits and lending money to member, borrowers (against jewels) and mortgage of property etc. For over a century Nidhis, with the objective of cultivating the habit of thrift, generally promoted by public spirited men drawn from affluent local persons, lawyers and professionals like auditors, educationists, including retired persons etc. The area of operation was local – within municipalities and panchayats. The functions of a Nidhi company are similar to a bank, but the difference lies in the approach. The funding process starts when the members start contributing funds to the company. Those funds are later used to provide loans to the members.
The principle of mutual benefit has been incorporated to pool the savings from members and lend only to members and never have dealing with non-members. Nidhis were not expected to engage themselves in the business of Chit Fund, hire purchase, insurance or in any other business including investments in shares or debentures. As stated, these Nidhis do their business only with Members. Such Members are only individuals. Bodies Corporate or Trusts are never to be admitted as Members in these companies. Nidhi companies are effectively non-banking financial companies and are engaged in the business of accepting deposits and making loans to their members. The deposit taking activities of Nidhis are governed by the RBI Act and guidelines made thereunder.
CHECKPOINTS:
Pre-requisites for Incorporation as a Nidhi Company: -
(*In case number of Subscribers are more than Seven then physical copies of MOA & AOA needs to be attached)
Purpose of Form:
Application for GSTIN (Optional); EPFO, ESIC, Professional Tax (Mandatory for Companies registered in Maharashtra, West Bengal and Karnataka); Opening of Bank Account; Shop and Establishment Registration Number (only for Delhi location);
Purpose: Form for Declaration by First Subscribers & Directors as per applicable Rules;
Type:-
It is Web Based Auto Generated Form (In case if total number of subscribers and/ or directors exceeds twenty (20) and / or any such subscriber/ director has neither DIN/ PAN then it is required to be attached to Spice+ Part B)
Spice+ is the Web based Form which is required to be filled online, once all the details are filled, the E-Forms can be downloaded by clicking on download icon for affixing DSC’s and then such Forms can be uploaded like Normal other E-Forms after making payment of requisite fees.
Purpose of Form: Application for: - Incorporation of Company; Allotment of DIN up to three applicants; PAN; TAN.
*Nidhi may provide locker facilities on rent to its members, provided rental income from such facilities shall not exceed 20% of the gross income of the Nidhi at any point of time during a financial year;
(*Deposits may be accepted in the name of minor, if they are made by natural or legal guardian who is member of Nidhi)
Rule 17 of Nidhi Rules, 2014 As per the said rule, the Director shall be member of Nidhi;
Every Nidhi shall within a period of 120 days ((*as per Nidhi Amendment, Rules 2022, prior to amendment it was 1 year ;) from the date of incorporation ensure that: -
Absolutely, because these companies are directed Companies Act, 2013, rules made thereunder, Ministry of Corporate Affairs of India & RBI
Nidhi Company shall not –
It may be noted that private circulation of the details of fixed deposit Schemes among the members of the Nidhi carrying the words “for private circulation to members only” shall not be considered to be an advertisement for soliciting deposits.
Nidhi Companies which have adhered to all the provisions of these rules may provide locker facilities on rent to its members subject to the rental income from such facilities not exceeding twenty per cent of the gross income of the Nidhi at any point of time during a financial year.
We being the professional firm understand the requirement of its clients and helps them to achieve their goals. Give wings to your dreams by registering your Nidhi Company today. Let’s encourage the members to save money and invest them within the company that whenever they are short of funds they can approach & borrow them from your Nidhi Company. If you have any questions, feel free to mail us at info@ccoffice.in or connect at 9988424211.