INTRODUCTION TO NIDHI COMPANY AND HOW TO REGISTER NIDHI COMPANY


INTRODUCTION TO NIDHI COMPANY AND HOW TO REGISTER NIDHI COMPANY

DUDHORIA CONSULTANCY SERVICES PVT LTD

Introduction:
In India, Nidhi Companies are formed with the object of cultivating habit of thrift and savings among its members, receiving deposits from, and lending to its members only, for their mutual benefit.
Section 406 of the Companies Act, 2013, the Companies (Nidhi Companies) Rules, 2014 and Chapter XXVI of the Companies Rules, 2014 deals with the provision of Nidhi Companies.
 
Applicability:
Nidhi Rules, 2014 shall be applicable to the following:
(a)Every company which had been declared as a Nidhi or Mutual Benefit Society under sub-section (1) of
Section 620A of the Companies Act, 1956;
 
(b) Every company functioning on the lines of a Nidhi company or Mutual Benefit Society but has either not applied for or has applied for and is awaiting notification to be a Nidhi or Mutual Benefit Society under sub-Section (1) of Section 620A of the Companies Act, 1956; and
 
(c) Every company incorporated as a Nidhi pursuant to the provisions of Section 406 of the Act.
(d)Every Company declared as Nidhi or mutual Benefit Society under sub-section (1) of Section 406 of the Act.
 
Criteria for getting “Nidhi” Status:
Ø  A Nidhi Company shall be a Public Company;
Ø Rs. Five lakhs is required as minimum paid-up equity share capital of the Company.
Ø  Every “Nidhi” Shall have last words “Nidhi limited” as part of its name.
Ø  A Nidhi cannot issue Preference share.
 
Member’s requirement FOR NIDHI COMPANY:
Ø  A Nidhi Company shall not admit Body Corporate or trust as a member.
Ø  Minimum 7 members are required to start a Nidhi company, out of which 3 members must be director of the Company;
Ø  Every Nidhi shall ensure that its membership is not reduced to less than two hundred members at any time.
Ø  A minor shall not be admitted as a member of Nidhi.
 
Documents required for Nidhi Company Registration:
Documents of Directors and Shareholders:
§  PAN Card
§  Passport-sized photographs;
§  Address proof (Bank Statement/ Driving License/ Residence card)
§  Residential Proof(Mobile Bill/ Telephone Bill/ Electricity Bill/ Bank Statement);
§  Passport(in case director is a foreign national)
 
For Directors:
§  Digital Signature(DSC);
§  Director Identification number(DIN)
 
Office Proof Documents:
§  Registered office Proof (Electricity Bill/ Water Bill/Property Tax).
§  Ownership Documents (In case of owned Property)
§  Rent agreement & No-objection Certificate (in case of Rented Property)
 
Company’s Documents:
§  Memorandum of Association(MOA);
§  Articles of Association (AOA).
 
Post Incorporation requirement:
According to Rule 5 of Nidhi Rules, 2014:
Every Nidhi within one year from the date of its Incorporation, ensures that it has-
a)      Not less than 200 members;
b)      Net Owned funds of Ten lakhs Rupees or more;
c)       Unencumbered term deposits of not less than ten percent of the outstanding deposits as specified in Rule 14;
d)      Ratio of Net owned funds to deposits of not more than 1:20.
 
 Statutory Compliances to be complied:
FORM NDH-1:
Every Nidhi Company within a period of 90 days from the closure of its financial year shall file a Return of Statutory Compliances in FORM NDH-1 with ROC.
The Form shall be certified by a Company Secretary in Practice or Chartered Accountant in practice or Cost Accountant in practice.
 
FORM NDH-2:
 
Extension of another financial year: If Nidhi is not complying with clause (a) or (d) i.e., minimum 200 members and ratio of Net owned funds to deposits not more than 1:20, it shall within thirty days from the close of the first financial year, apply to the Regional Director in Form NDH 2 for extension of time and the Regional Director may consider the application and pass orders within thirty days of receipt of the application.
The Regional Director may extend the period upto one year from the date of receipt of application.
If the failure to clause (a) or (d) continues beyond Second financial Year, the Nidhi company shall not accepts any further deposits from the commencement of Second financial year till it complies with the conditions mentioned in Clause(a) or (d) and also penalty will be imposed.
FORM NDH-3:
Company falling under Rule-2 of Nidhi Rules, 2014 shall file half-yearly return in Form NDH-3. The Return shall be filed within 30 days from conclusion of each half-year. The form shall be certified by a Company secretary in Practice or Chartered Accountant in Practice or Cost Accountant in Practice.
General Restrictions on Nidhi Company:
As per Rule 6 of Nidhi Rules, 2014, No Nidhi Company Shall-
a)      carry on the business of chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by any Body corporate;
b)      issue preference shares, debentures or any other debt instrument by any name or in any form whatsoever;
c)       open any current account with its members;
 
d)      acquire another company by purchase of securities or control the composition of the Board of Directors of any other company in any manner whatsoever or enter into any arrangement for the change of its management, unless it has passed a special resolution in its general meeting and also obtained the previous approval of the Regional Director having jurisdiction over such Nidhi;
e)      carry on any business other than the business of borrowing or lending in its own name.
      
      This article is complied by CS NISH RATHI from Dudhoria Consultancy Services Pvt Ltd for any queries in regard with Nidhi Company you can connect to us at  taxdcs@gmail.com  or login to our website at   www.taxdcs.co.in 

 
 
 
 

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  1. Connect with us for transparent and error free Company Registration . We do Private limited Company registration
    One Person Company Registration
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  2. Connect with us for transparent and error free Company Registration . We do Private limited Company registration
    One Person Company Registration
    Public Company Registration
    Nidhi Company Registration
    PAN and TAN registration
    Income Tax Filings and Litigations



    Dudhoria Consultancy Services Pvt Ltd
    www.taxdcs.co.in

    ReplyDelete

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