What is Nidhi Company?

A Nidhi Company is like a special type of savings and lending company in India. It’s a registered company that takes money as deposits from its own members and then lends that money to those same members when they need it. This is done to promote saving habits among its members and help them in times of financial need. Nidhi Companies are regulated by the government’s Ministry of Corporate Affairs, and the Reserve Bank of India oversees their deposit-taking activities.

However, there are some rules and restrictions they must follow. For instance, they can’t do things like chit funds, hire purchase finance, or take deposits from people who aren’t members. They can’t advertise to get deposits or pay commissions for gathering money. But overall, Nidhi Companies are set up to benefit their own members by encouraging saving and providing financial help when necessary.

Application Requirements for Nidhi Company Registration

• Shareholders: You must have at least 7 people who are willing to become shareholders of the company.
• Directors: You need a minimum of 3 directors to manage the company.
• Unique Name: Choose a unique name for your company that ends with the words “Nidhi Limited.”
• Registered Address: Have a proper address where your company will be located and registered.
• Minimum Capital: You’ll need to have at least Rs. 5 lakhs as paid-up equity share capital to start the company.
• Object in Memorandum: You should have a clear statement in the company’s Memorandum of Association that outlines the purpose of the Nidhi company, which is to accept deposits and lend money to its members for their mutual benefits.

Documents Needed to Register a Nidhi Company

• For the Members (People Starting the Company) :
  • A color photo of each person involved.
  • The PAN card of each person.
  • Identity proof, which can be your Voter ID, Driver’s License, Passport, or Aadhar Card.
  • Proof of where you live, like an electricity bill, phone bill, gas bill, water bill, or a recent bank statement.
  • Email Id and Mobile Number
• For the Premises (Where Your Company Will Be Located):
  • Proof of the address where your company will be, such as an electricity bill, phone bill, water bill, or gas bill (not older than 2 months).
  • If you’re renting the place, you need a notarized rental agreement or a copy of property documents. Plus, a No Objection Certificate from the property owner.