Nidhi Company is the most beneficial company plan type to register for individuals who are planning to initiate a loan or finance company. It guarantees affordability, ease and straightforwardness. This company plan is in accordance with Companies Act, 2013. The RBI regulates the activities of Nidhi Companies.

Nidhi Company Registration is a process that allows for the formation of a Nidhi type of NBFC. It is also known as Mutual Benefit Finance Company. It deals with acknowledgement and management of loaning and depositing of cash. Nidhi plan is considered to be more convenient in comparison to any other plan of NBFC.

Nidhi firms are benefited with unique concessions in terms of annual compliance and taxation. The formation of the Nidhi Company will instil in its members a sense of savings and prudent spending of money. Basically, it procures the funds from their members and passes it on to another.

Nidhi companies, also known as Nidhi Bank, attempts to develop the upsides of frugality among their members. According to the rules governing Nidhi Company, it can conduct business within specific work boundaries and only with its registered members. Directors in this type of NBFC are not bound by some minimum qualification requirements. "Nidhi Limited" must appear at the end of the names of all Nidhi Companies at all costs.

Relevant information about Nidhi Company Registration

There are some key points that need to keep in mind before Nidhi Company Registration-

• Section 406 of the Businesses Act 2013 and the Nidhi companies' rules of 2014 contain all the government related provisions set up for Nidhi companies within India's geographical and legal boundaries. • Nidhi Companies have obtained the title of Mutual Benefit Societies since they assist all members by doing all possible things for their mutual benefit and wellbeing. All Nidhi Companies members take part in all lending and borrowing activities.

• Because Nidhi Companies engage in the business of lending money and receiving deposits from only their members, RBI has granted them numerous exemptions.

• Deposits in the Nidhis sector earn a low rate of return compared to deposits in the banking industry.

• The RBI is in charge of offering directives and recommendations to Nidhi Companies. These are mostly concerned with investments and the majority of a company's financial activity. (NBFCs are included as well)

• Deposits in the Nidhi Company earn a low rate of return compared to deposits in the banking industry.

Required Documents Nidhi Company Registration

• Identity proof and address proof of all the directors and investors • No Objection Certificate (NOC) signed by landlord

•PAN card of Directors

• Address proof of company place (electricity bills, utility bills, etc) • Copy of Rent Agreement

• Aadhar card of all the Directors and Investors

• Copy of property papers

• Passport size photos of all the Directors

Advantages of Nidhi Company
  Most people in our country desire to work in the financial sector, but because of the shortage of capital they can't move further. The main goal of founding a Nidhi Company is to instil in its members the practise of tightening their monetary belts so that by prioritising savings, they would not have any difficulty meeting their financial needs if they arise. Apart from that, there are several benefits of forming a Nidhi Company that are yet to be discovered. The following are some of the reasons why people select Nidhi Companies:

• Limitation of Liability- The Panel of directors and shareholders are subjected to limited responsibility under the Companies Act of 2013. Either the company will make a profit or it will lose money in the commercial world. If the company suffers a setback or goes through financial hardship while conducting business, banks, any finance body or the government has no authority to seize the personal assets of any of the directors or shareholders.

• Simple Procedure- Nidhi Company's registration process is devoid of all sorts of complications. Initiating a Nidhi Company is a simple procedure due to the lack of documentation required from start to finish in Nidhi Company Registration. Furthermore, the registration process takes only 7- 14 days to complete.

• Legal Entity- Being a different legitimate element from its directors, investors and also as promoter, Nidhi Company can claim property and bring about obligations on its name. It has the authority to sue or can be sued by others if any such problem arises. In case of need of funds by the company, it cannot request for contribution to any of the members.

• Indefinite Existence- A Nidhi Company's existence remains uninfluenced by the death or departure of any of its members because it is perpetual. This allows the Nidhi Company to proceed until it is closed legitimately.

• Government's Basic Guidelines- Because Nidhi Companies are governed by the Nidhi Rules, 2014, they are subjected to fewer RBI regulations. The Central Government retains control over regulation and monitoring. Despite the fact that Nidhi Company is an NBFC, it rarely observes RBI regulations. You may surely set up your Nidhi Company in India because the RBI will not cause any problems. • Easy Management- In contrast to other NBFCs, bringing modifications to Nidhi Company is not a source of anxiety and concern.

• Value of High Confidence- In a developing country like India, everyone from an eight- year- old child to a sixty- year- old senior is interested in saving money. Here, the practise of saving is aligned with Nidhi Company's main aim. One of Nidhi Companies' key goals is to develop the monetary savings habit of its members. Members would continue to save because it is a going concern of the company with a high level of assurance.

• Availability of Funds- The Nidhi Company is the safest, reliable and most convenient way to take deposits from the general population. The only prerequisite is that they must be registered members. • Meeting the Needs of the Working and Middle Classes- Nidhi Companies play an important role in meeting the requirements of needy people by providing financial assistance without the need for additional documentation.

Necessities for Nidhi Company Registration:

There are some required necessities that must be fulfilled before registration as Nidhi Company-

• Minimum number of 3 (three) directors are required

• Maximum 7 (seven) members can be there

• Minimum paid- up capital of Rs 5 lakh is required

• It is prohibited to issue any shares

• Main goal is to develop saving habit by collecting the money and giving it to the other members

• Director's Director Identification Number (DIN)

Obligatory Rules for Nidhi Company

Nidhi Company is required to adhere to several regulations:

1. NDH 1 - A Nidhi Company must fill out this form and submit a list of members of Nidhi Company within 90 days of the financial year's end.

2. NDH 2- A Nidhi Company can make a solicitation to MCA for some extension through this form in case the company is not able to add 200 members within its first financial year.

3. NDH 3- A Nidhi Company must also file a half-yearly return in NDH 3 Form in addition to the forms stated above.

4. ROC Annual Returns- It's necessary for a Nidhi Company should record a yearly return with the Ministry of Corporate Affairs using Form MGT-7

5. Balance sheet of profit and loss- A Nidhi Company must produce bank account statements and other associated documents in Form AOC-4.

6. Income Tax Returns (ITR)- Nidhi Company just like the rest of the firms, has to file annual returns by September 30 of the next financial year.

Procedure for Nidhi Company Registration

Despite the fact that the Nidhi Company Registration process is very easy to follow, one should seek professional assistance to make even the most complicated of tasks simple. With the assistance and advice of experts, completing and filing difficult paperwork becomes a breeze. Additionally, it would be efficient to do so with their help. The government portal and some tricky wording can make things difficult at times.

The Nidhi Company consolidation method includes numerous things which are as per the following:- Filling up the forms -

• INC 9

• DIR 2

1. Starting of KYC by the Directors and Members- The KYC part must be completed by all the directors and shareholders. Essentially there ought to be three directors alongside the seven members. A person can be both the director and a member of the board. It's possible that both are the same.

2. Digital Signature Certificate (DSC)- The Nidhi Company Registration accelerates when the primary prerequisite, Digital Signature Certificate (DSC) is there. Additionally, it's compulsory to get all of the submitted documents self- attested.

3. Choosing a Name- The principal prerequisite is to choose and recommend around three names to continue further in the Nidhi Company Registration Process. The MCA chooses only one name out of the three, rejecting the other two. Another element to think about is the distinctiveness of the suggested names. They should also not be too similar to the names of previously registered businesses or companies. The combination of SPICe+ and a web-based form will assist with confirming the name.

4. Memorandum Of Association (MOA) and Articles Of Association (AOA)- Nidhi Company Registration Application is filed along with Nidhi's Memorandum Of Association (MOA) and Articles Of Association (AOA), respectively, after the name approval process is completed. An orderly inspection of the application happens prior to the issue of the Certificate of Intent (COI.) Finally, a COI is granted.

5. TAN or PAN and Bank Account Opening- Within 7 days, one should have your PAN and TAN. Following that, one must submit the Articles of Association (AOA), Memorandum of Association (MOA), Certificate of Incorporation and PAN Card to the bank in order to open a bank account.

6. RBI Guidelines- Because a Nidhi Company falls under one class of Non-Banking Financial Companies (NBFC) in terms of deposit acceptance operations, the RBI has the authority to issue directives. Nonetheless, because the Nidhi Company solely transacts with its shareholders and members, RBI has granted it an exclusion from the RBI Act's grounding rules and other directives that apply to NBFCs.

Obligatory Rules for Nidhi Company

Nidhi Company is required to adhere to several regulations:

1. NDH 1 - A Nidhi Company must fill out this form and submit a list of members of Nidhi Company within 90 days of the financial year's end.

2. NDH 2- A Nidhi Company can make a solicitation to MCA for some extension through this form in case the company is not able to add 200 members within its first financial year.

3. NDH 3- A Nidhi Company must also file a half-yearly return in NDH 3 Form in addition to the forms stated above.

4. ROC Annual Returns- It's necessary for a Nidhi Company should record a yearly return with the Ministry of Corporate Affairs using Form MGT-7

5. Balance sheet of profit and loss- A Nidhi Company must produce bank account statements and other associated documents in Form AOC-4.

6. Income Tax Returns (ITR)- Nidhi Company just like the rest of the firms, has to file annual returns by September 30 of the next financial year.

Procedure for Nidhi Company Registration

Despite the fact that the Nidhi Company Registration process is very easy to follow, one should seek professional assistance to make even the most complicated of tasks simple. With the assistance and advice of experts, completing and filing difficult paperwork becomes a breeze. Additionally, it would be efficient to do so with their help. The government portal and some tricky wording can make things difficult at times.

The Nidhi Company consolidation method includes numerous things which are as per the following:- Filling up the forms -

• INC 9

• DIR 2

1. Starting of KYC by the Directors and Members- The KYC part must be completed by all the directors and shareholders. Essentially there ought to be three directors alongside the seven members. A person can be both the director and a member of the board. It's possible that both are the same.

2. Digital Signature Certificate (DSC)- The Nidhi Company Registration accelerates when the primary prerequisite, Digital Signature Certificate (DSC) is there. Additionally, it's compulsory to get all of the submitted documents self- attested.

3. Choosing a Name- The principal prerequisite is to choose and recommend around three names to continue further in the Nidhi Company Registration Process. The MCA chooses only one name out of the three, rejecting the other two. Another element to think about is the distinctiveness of the suggested names. They should also not be too similar to the names of previously registered businesses or companies. The combination of SPICe+ and a web-based form will assist with confirming the name.

4. Memorandum Of Association (MOA) and Articles Of Association (AOA)- Nidhi Company Registration Application is filed along with Nidhi's Memorandum Of Association (MOA) and Articles Of Association (AOA), respectively, after the name approval process is completed. An orderly inspection of the application happens prior to the issue of the Certificate of Intent (COI.) Finally, a COI is granted.

5. TAN or PAN and Bank Account Opening- Within 7 days, one should have your PAN and TAN. Following that, one must submit the Articles of Association (AOA), Memorandum of Association (MOA), Certificate of Incorporation and PAN Card to the bank in order to open a bank account.

6. RBI Guidelines- Because a Nidhi Company falls under one class of Non-Banking Financial Companies (NBFC) in terms of deposit acceptance operations, the RBI has the authority to issue directives. Nonetheless, because the Nidhi Company solely transacts with its shareholders and members, RBI has granted it an exclusion from the RBI Act's grounding rules and other directives that apply to NBFCs.

Frequently Asked Questions-

1. Can a Nidhi company take a loan?

No, a Nidhi Company can't take loans from financial bodies but from its members.

2. How many days are required to register a Nidhi company?

For about 30 to 40 days are required to register as a Nidhi company.

3. Can a Nidhi Company perform any operations outside the registering state?

No, a Nidhi company cannot do any operation outside the business state it has been registered in.

4. Is any particular registered office required for Nidhi Company registration?

Nidhi company can run in the residential place only if necessary.

5. Is the PAN card of Directors necessary for registration?

Yes, a PAN card is mandatory.