Nidhi Company Registration

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Nidhi Company Registration

“Nidhi” is a Hindi word, which means finance or fund. Nidhi means a company which has been incorporated with the object of developing the habit of thrift and reserve funds amongst its members and also receiving deposits and lending to its members only for their mutual benefit.
Nidhi company requires minimum 3 members. It might not issue preference share. If preference shares have already been issued by a Nidhi Company before initiation of this Act, such preference shares are to be redeemed in accordance with the terms of issue of such shares. All the Nidhi company’s incorporated shall have the last word as “Nidhi Limited” as part of its name.

Required for NIDHI Company Registration

Documents Required

  • Copy of Director’s PAN Card
  • Passport size photograph of Directors
  • Copy of Aadhaar Card/ Voter identity card of directors
  • Copy of Rent agreement(If rented property)
  • Electricity/ Water bill (Business Place)
  • Copy of Property papers (If owned property)
  • Landlord NOC (Format will be provided)

Minimum Requirements Before Incorporation

  • Minimum 7 shareholders
  • Minimum 3 Directors
  • Minimum Capital of Rs. 10 lacs
  • DIN for all directors

Minimum Requirements After Incorporation

  • Minimum number of 200 Shareholders
  • Net owned Fund shall not be less than Rs. 10 Lacs
  • Unencumbered deposits of not less than 10% of the outstanding deposits
  • Net owned funds to deposits ratio should be more than 1:20

Nidhi Companies in India

  • Concept of Nidhi Company Nidhi Companies in India were created for cultivating the habit of small savings targeted for the lower and middle class. Its investment structure consists of realigning funds within a growing group of members who benefit from returns at fixed durations.
  • Advantages Of Nidhi Company • Promotes savings among middle and lower middle class • Accepts term deposits • Easy source of loan to members • Loans with minimum documentation • Secured means of investment.
  • Important Points to Consider while Registering a Nidhi Company • Nidhi company must have unencumbered term deposits of not less than 10% of the outstanding deposits • Nidhi must have net owned funds of Rs.10 lakh or more • Minimum 7 Shareholders and 3 directors are required to incorporate a Nidhi Company • Nidhis can issue only rights shares.
  • Important Points to Consider while Registering a Nidhi Company • Nidhi members should not exercise above 10% of the total voting rights • Membership should feature a minimum of 200 shareholders • Investments for minors can be done when the legal guardian is a member of the Nidhi • Nidhi Company shall issue equity shares of a minimum value of Rs10 • Nidhi Company should not be allowed to issue any new preference shares at any time.

Public Limited Company

A public limited company registration in India with minimum paid-up capital at the time of incorporation INR 500,000/-. There is no limited to the maximum number of shareholders, but the minimum number of member must be seven. Again, there must be at least three directors to the proposed public limited company. The proposed names must include in the end the words, ‘Limited’. A company whose securities are traded on stock exchange and can be bought and sold by anyone.

Why Public Limited Company?

  • LARGER FUNDS: The capital of a public company is generally raised from the public. People belonging to all walks of life throughout the country can buy shares which are priced at low levels.
  • LIMITED LIABILITY: The liability of members of a public company is limited. They have to face limited risk.
  • TRANSFERABILITY OF SHARES: The shares of a public company are freely transferable. This makes investment in the shares liquid and an investor is not bound to remain with the company.
  • DEMOCRATIC MANAGEMENT: Management of a company is not confined to a few persons. Shareholders can elect and remove directors. They exercise control over management in general meetings of the company.
  • PUBLIC CONFIDENCE: A public company enjoys greater confidence of public because its accounts are published and it operates under statutory regulation and control. Shares of a public company are traded on stock exchanges.
  • GROWTH OF CAPITAL MARKET: A public limited company facilitates the growth of a healthy capital market primary and secondary markets for securities have developed largely due to the shares and debentures issued by public companies.