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Nidhi Company - Nidhi Company with TaxTrims
Nidhi

Nidhi Company

Nidhi Company

# Benefits of Nidhi Company Registration

  • 1

    Cheaper To Borrow :

    As a member, one can borrow money at a minimum rate, relative to the rate at which banks lend money. This can be a major advantage in times of need, as different individuals in the mutual benefit society are likely to need funds at different points in time.

  • 2

    Encourages Savings :

    It encourages all its members to save money and encourages a thrifty lifestyle. A Nidhi Company, after all, is a mutual benefit society wherein members can lend or borrow money and accept financial aid amongst them.

  • 3

    Fewer Complications :

    Borrowing and lending to known persons, where the procedure is fixed, is much less complicated than dealing with banks or in an informal setting. A Nidhi Company enables its members to unlock the potential of their money and gain from lower interest rates when they require money themselves..

# Checklist For Nidhi Company

  • Step 1
    : At least seven members are mandatory to form a Nidhi company. Out of these, three should be designated as the directors. However, it should acquire a minimum of 200 members within one year of commencement.
  • Step 2
    : Moreover, the company should have a minimum equity share capital of Rs 5 lakhs, for registering as a Nidhi Company. This entire amount has to be paid up. However, the Net Owned Funds (NOF) must be increased to Rs 10 lakhs within a year of registration.
    a. At least 10% of its outstanding deposits should comprise of un-encumbered term deposits.
    b. The prescribed NOF to deposits ratio should be 1:20.
    This includes equity share capital and free reserves and excludes accumulated losses as well as intangible assets.
  • Step 3
    : At least 10% of its outstanding deposits should comprise of un-encumbered term deposits
  • Step 4
    : The prescribed NOF to deposits ratio should be 1:20. where 10% of the total deposits are in a fixed deposit account of a nationalized bank.

# What are the 10 things Nidhi Companies cannot do as an NBFC (Non-Banking Financial Company)?

A Nidhi company cannot deal in the following :
  • 1

    Chit fund business

  • 2

    Hire purchase finance

  • 3

    Acquisition/insurance of securities issued by any corporate

  • 4

    Engaging as an NBFC in the business of advances or loans

  • 5

    Leasing finance

  • 6

    Acquisition of stocks/shares /bonds/securities/debentures issued by any local authority /Govt./marketable securities

# Tax Trim’s Procedure for Nidhi Company Registration

Contrary to what you might think, registering a Nidhi Company is a simple 3-Step process and can be done completely online. We’ve laid it out below :
  • Step 1
    : Name Reservation – We help you reserve your name with MCA.
  • Step 2
    : DSC and DINs – We help you get 1 DSC and 3 DINs.
  • Step 3
    : Documents and approval – We help you at every stage of the documentation process and in getting in-principle approval from the RBI.

# Documents Required for Nidhi Company Registration

To Be Submitted By All Directors:

• Self-attested copy of PAN Card

• Self-attested copy of Driver’s License/ Voter ID/ Aadhaar Card/Passport

• Self-attested copy of Bank Statement/ Telephone Bill/Mobile Bill/ Electricity Bill

• Passport-size Photograph

• Specimen Signature Certificate