INCORPORATION PROCEDURE OF NIDHI COMPANY
Overview of Nidhi Company Registration
Nidhi Company belongs to a type of company in the non-banking financial sector as recognized under Section 406 of the Companies Act, 2013. Its main business is borrowing and lending between its members. They are also considered mutual funds, mutual funds, mutual funds and mutual benefit fund companies. The Ministry of Corporate Affairs administers these entities in India and reserves the right to issue instructions regarding depository activities. The main objective of these institutions is to encourage the habit of thrift and thrift among their serving members. The concept of Nidhi company is very popular in the south region of India.
Benefits of Incorporating Nidhi Companies in India
The formation of a Nidhi society is done by a very simple process. There are certain requirements for incorporation of a Nidhi company such as: B. At least seven members, three of whom are appointed as directors, and a simple and hassle-free documentation process.
Non-Compliance of Reserve Bank of India
Nidhi Company shall not comply with any directive of the Reserve Bank of India. So Nidhi Company is free to publish its own rules.
Lending, borrowing or escrow transactions are done by members only, which reduces the risk of financial problems in Nidhi's company.
Registration of Nidhi corporation does not burden the director's pocket, because it is very simple compared to the registration process in other BFFC, so it does not affect the director's finances. It also helps Nidhi company to get business loans anytime for company development.
The concept and objective of Nidhi society is to encourage savings among Indians.
Net Equity Financing System
Nidhi Company follows a net equity financing system viz. X) a transaction in which funds are deposited with the company to obtain funds for it. This feature makes Nidhi business more efficient for the owners and helps the business grow.
Documents for Nidhi Company registration
Directors Identification Number, i.e. DIN. What is DIN ? DIN is a unique Identification Number allotted to an individual who is appointed as a director of a company.
PAN number of the proposed directors and members
Residential proof and address proof of the proposed directors and members
Photographs of the proposed directors and members
Identification Documents like Aadhar card
Registered business place proof such as lease or rent agreement
Ownership proof of the business place in case the premises are owned
NOC if required
MOA i.e., Memorandum of Association
AOA, i.e., Article of Association
Benefits of Nidhi Company
It is easy for Nidhi's company to finance or borrow capital from or lend to group members.
Minimum Capital Requirements
No External Participation in Management
Ease of Compliance
Easy Transfer of Ownership
Low Interest Rates
Clear Targets for Gifts and Easy Loans.
Exemptions and Privileges under Companies Act, 2013
Least intervention of R.B.I
Procedure for Nidhi Company Registration
1. For Incorporation of Nidhi company you will have to go to the website of the Minister of Corporate affairs.
And have to create an account to log in.
2. Once you login to the website, next you will have to click on MCA services and click on Spice+.
3. After this go for a new application and you will get your Spice+ form on the window.
4. Above picture is of Spice+ form. Fill the details in your form as shown in the picture. In main division section type "65" only otherwise your company will get rejected. Next you will have to enter two names for your company . Name should end with "Nidhi Limited".
5. Once you complete the above procedure, click on auto check. You will get a confirmation alert after the approval, with two options one is incorporated now and other is reserve now. If you want to reserve the name for future and don't want to incorporate, then go for the second option otherwise select the first one.
6. With all the due procedure part A of Spice form is completed. Next is Part B of the Spice form.
7. Now in the above picture you can see the Part B of the spice form.
8. In the first point of the form select no , as there won't be any changes in the article of association.
9. Next section is the capital structure of the company. Under Nidhi, the company is required to raise 10 lakh capital in one year. Now Nidhi company can be incorporated for a minimum 5 lakh but after a year you will have to fill the company again to complete the one year compliance, so it's better to start your company with 10 lakh capital.
What is authorized share capital? The authorized capital of a company is the maximum amount of share capital that the company is authorized to issue to shareholders under the articles of association. A part of the authorized capital may remain unused. The authorized capital can be changed with the consent of the shareholders.
What is subscribed share capital? Subscribed share capital refers to all capital raised by subscribed shares. Simply put, this is the value of all the shares that investors want to buy in the new issue. Subscribed shares are a certain number of shares that investors promise to buy during an offering, usually through an IPO.
Fill in the details as shown in the picture. After this click on save and continue.
10. After this you will have to enter the details of your company address .