Register Nidhi Company in Kerala
Nidhi companies are mutual benefit companies which works for the benefit of its members. Operations of Nidhi Company are limited to its members, wherein the companies are permitted to accept deposit and give loan to its members.
Legal compliances and requirements of Nidhi company are far less when compared with the NBFC’s, which are functioning under the strict regulations of RBI.
Nidhi companies are suitable to the following persons.
- Those who are doing business under money lenders license
- Association of persons who intends to form an entity for their mutual benefit
- Businessman who are interested in finance business.
Requirements for Registration of Nidhi Company
- Minimum Capital of Rs.5,00,000
- Minimum 7 persons as members of the company
- Minimum 3 directors
- Name of the company should end with the words Nidhi Limited
Features of Nidhi Company
- Nidhi company is public limited company, hence all the compliance’s as applicable for public companies shall also become applicable to nidhi companies.
- RBI registrations are not required for nidhi companies
- A Nidhi may open branches, only if it has earned net profits after tax continuously during the preceding three financial years.
Post registration compliances
After, registering your nidhi company, you should ensure the following additional compliances
Within end of its financial year, nidhi company should have
- not less than two hundred members;
- Net Owned Funds of ten lakh rupees or more;
- unencumbered term deposits of not less than ten per cent. of the outstanding deposits as specified in rule 14; and
- ratio of Net Owned Funds to deposits of not more than 1:20.
Interest on loan and deposit
- The rate of interest to be charged on any loan given by a Nidhi shall not exceed seven and half per cent. above the highest rate of interest offered on deposits
- A Nidhi may offer interest on fixed and recurring deposits at a rate not exceeding the maximum rate of interest prescribed by the Reserve Bank of India which the Non-Banking Financial Companies can pay on their public deposits.
Securities
A Nidhi shall give loans to its members only against the following securities, namely:-
- Gold, silver and jewellery:
- Immovable property:
- Fixed deposit receipts, National Savings Certificates, other Government Securities and insurance policies:
How to add members to nidhi company
Nidhi company should ensure that it has at least 200 members as on end of financial year. Procdure to add new members are of two ways
- An existing member of nidhi will transfer some of his share to new persons by executing share transfer form. or
- Company will issue new shares to new persons.
What if the company is not able to add 200 members
If the company is not able to add 200 members, then the company may apply to regional director for extension of time within 30 days from the end of financial year.
Registering your company for carrying out the business of nidhi company is an easy process. Recently, Government has simplified the procedure for registering your company.
Procedure for registering your company
- Obtain Digital Signature Certificate (DSC)
- Checking Name Availability
- Preparation of Memorandum of Association, Articles of Association, Declarations, Affidavits and other documents
- Filing forms for incorporating company along with the application for PAN and TAN of the Company
- Make Payment for application for registration along with stamp duty based on the authorized capital of the proposed company and the fees for PAN and TAN
- Obtaining Certificate of Incorporation
- Post Incorporation works
Basic Documents required for registering your company.
For Digital Signature
- Pan Card and Address proof of the applicants (Passport in case of foreign national)
- Passport Size Photograph of the Applicant
For Director Identification Number
- Pan Card and Address proof of the proposed Directors (Passport in case of foreign national)
- Passport Size photo of proposed director
- Personal details of the proposed director
For Company Registration
- Proposed name of the company
- Electricity Bill/ Mobile Bill/ Telephone Bill/ Gas bill (not older than two months) of the proposed registered office of the company
If you need assistance in registering your Nidhi company, contact us
