Online Nidhi Company Registration in India

Online Nidhi Company registration in India involves the following steps:

1. Obtain Digital Signature Certificate (DSC):

• The first step is to obtain Digital Signature Certificates (DSC) for the proposed directors and subscribers of the company. DSC is required for filing the online registration forms.

2. Apply for Director Identification Number (DIN):

• Each director of the Nidhi Company must obtain a Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA). DIN can be obtained by filing Form DIR-3 online.

3. Name Reservation:

• Apply for name reservation for the Nidhi Company through the MCA portal. The proposed name should comply with the naming guidelines specified by the MCA.

4. Drafting of Incorporation Documents:

• Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) of the Nidhi Company as per the format provided in the Companies Act, 2013.

5. Filing of Incorporation Forms:

• Once the name is approved, file the incorporation forms (SPICe Form INC-32) along with the MOA, AOA, and other necessary documents online on the MCA portal.

6. Payment of Fees:

• Pay the requisite fees for incorporation and stamp duty (if applicable) online through the MCA portal.

7. Verification and Approval:

• After submission of the forms and payment of fees, the Registrar of Companies (RoC) will verify the documents and information provided. If everything is in order, the RoC will issue the Certificate of Incorporation.

8. Post-Incorporation Formalities:

• Once the company is incorporated, complete post-incorporation formalities such as obtaining the Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN), opening a bank account, and obtaining GST registration if applicable.

Benefits of Nidhi Company Registration

Registering a Nidhi Company in India comes with several benefits, especially for those looking to engage in lending and borrowing activities among its members. Here are some of the key benefits of Nidhi Company registration:

1. Ease of Formation: Nidhi Companies are relatively easy to form and require minimal capital compared to other types of financial institutions. The registration process is straightforward and less cumbersome, making it accessible to small groups of individuals seeking to pool their savings for mutual benefit.

2. Limited Liability: Members of a Nidhi Company enjoy limited liability, which means their personal assets are protected in case of any liabilities or losses incurred by the company. This feature provides a level of financial security and encourages individuals to participate in the company's activities without the fear of losing personal assets beyond their investment.

3. Encourages Savings and Investments: Nidhi Companies promote the habit of saving and investing among its members by providing them with a platform to deposit their savings and earn returns through lending activities within the group. This encourages financial discipline and fosters a culture of thriftiness and investment.

4. Mutual Benefit: The primary objective of a Nidhi Company is to promote the savings and lending activities among its members for their mutual benefit. Members can avail loans at reasonable interest rates without having to rely on external financial institutions, thereby fulfilling their financial needs within the community.

5. No External Funding Requirement: Unlike other financial institutions such as banks or NBFCs, Nidhi Companies are not allowed to accept deposits or lend money to non-members. This eliminates the need for external funding sources and reduces dependency on external investors or creditors.

6. Community Development: Nidhi Companies contribute to the socio-economic development of communities by providing financial assistance to its members for various purposes such as business expansion, education, housing, etc. This promotes entrepreneurship, employment generation, and overall economic growth at the grassroots level.

7. Regulated by Law: Nidhi Companies are regulated by the Ministry of Corporate Affairs (MCA) and are subject to the provisions of the Companies Act, 2013, and Nidhi Rules, 2014. This regulatory oversight ensures transparency, accountability, and compliance with legal and regulatory requirements, thereby safeguarding the interests of members and enhancing trust in the organization.

8. Tax Benefits: Nidhi Companies enjoy certain tax benefits under the Income Tax Act, 1961, such as deductions on business expenses, exemption from dividend distribution tax (DDT), etc., which can help optimize tax liabilities and enhance overall profitability.

Requirements for Nidhi Company Registration in India

To register a Nidhi Company in India, you need to fulfill certain requirements and adhere to specific procedures outlined by the Ministry of Corporate Affairs (MCA) and the Nidhi Rules, 2014. Here are the key requirements for Nidhi Company registration:

1. Minimum Number of Members:

• A Nidhi Company must have a minimum of 7 members at the time of incorporation.

2. Director Requirements:

• At least three directors are required for Nidhi Company registration.

• Each director must obtain a Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA).

3. Name Reservation:

• Choose a unique name for the Nidhi Company and apply for name reservation through the MCA portal.

• The proposed name must comply with the naming guidelines specified by the MCA.

4. Minimum Capital Requirement:

• A Nidhi Company must have a minimum paid-up equity share capital of Rs. 5 lakhs.

5. Registered Office:

• The company must have a registered office in India. The registered office address must be provided at the time of incorporation, and proof of ownership or rental agreement must be submitted.

6. Memorandum of Association (MOA) and Articles of Association (AOA):

• Draft the MOA and AOA of the Nidhi Company in accordance with the format prescribed under the Companies Act, 2013.

• The MOA must include the main objectives of the company, which should primarily involve accepting deposits and lending to its members.

7. Compliance with Nidhi Rules:

• Ensure compliance with the provisions of the Nidhi Rules, 2014, which govern the functioning of Nidhi Companies in India.

• The company must adhere to the restrictions and regulations outlined in the Nidhi Rules regarding acceptance of deposits, lending activities, investments, etc.

8. Digital Signature Certificates (DSC):

• Obtain Digital Signature Certificates (DSC) for all proposed directors and subscribers of the company. DSC is required for filing the incorporation forms online.

9. Submission of Incorporation Documents:

• Prepare and submit the necessary incorporation documents, including Form SPICe (INC-32), MOA, AOA, declaration by directors, address proof of registered office, etc., online through the MCA portal.

10. Payment of Fees:

• Pay the requisite fees for incorporation and stamp duty (if applicable) online through the MCA portal.

11. Verification and Approval:

• After submission of documents and payment of fees, the Registrar of Companies (RoC) will verify the details provided and, if everything is in order, issue the Certificate of Incorporation.

Documents Required for the Registration of Nidhi Company in India

Following are some crucial documents required for Nidhi Company Registration in India:

Basic Checklist:

1. Three Directors: A Nidhi corporation must have at least three directors, at least one of whom must be an Indian Citizen and Resident.

2. Seven Promoters: At least seven Promoters are required for a Nidhi firm. It is possible that the Promoter and Director are the same individuals. 

3. Unique Name: The business name must be unique. The proposed name must be identical or similar to any existing companies or trademarks in India. The words “Nidhi Limited” must appear in the Company’s name at the time of incorporation. 

4. Paid-Up Capital: A minimum paid-up equity share capital of Rs. 5 lakhs is required. 

5. Registered Office: The Company must have a physical location. Other Licenses should be obtained at the location.

Documents for Registered Office:

1. A copy of the most recent bank statement (within the past three months) or a copy of the most recent telephone bill, mobile bill, energy or gas bill (within the last two months) or,

2. Copies of property tax receipts,

3. Notarized rental/lease agreement,

4. Scanned copy of sale deed/property deed,

5. Property owner’s no objection certificate.

Documents for Indian Directors or Promoters:

1. PAN Card of all the Shareholders and Directors of the Company.

2. A recent passport-sized photograph of the shareholder/director (in jpeg/pdf format). 

3. ID proof such as Voter ID Card/Passport/Driving Licence is acceptable forms of identification. 

4. Proof of Address such as Bank Statement/Recent Electricity/Telephone/Mobile Bill 

NOTE: Please keep in mind that digital signatures are required for all prospective directors and promoters of the firm. It is essential for the incorporation application to be signed. DSC is available online. RegisterKaro support manager will submit the application and provide you with a link to complete the video eKYC verification. To authenticate the application, the applicant would need to record a brief video and enter an OTP.

Documents for NRI Directors or Promoters:

1. ID proof: Passport/PAN Card, which must be confirmed by the Indian embassy.

2. Address Proof: If the permanent address is in India- Bank Statement/Latest Electricity/Telephone/Mobile Bill: certified by any competent CA/CS or CMA (Practising). 

3. Current abroad address and if the country is a CommonWealth (CW) country: Hague Convention (HC): Notarised by a Public Notary and apostilled by the appropriate government of such country. 

4. Outside of CW or HC: Notarised by a Notary (Public) of such country, with the Notary’s certificate certified by a Diplomatic or Consular Officer.

Documents for Foreign Nationals:

1. ID proof (Passport/PAN Card) & Address Proof.

2. Residing in his own country under Hague Convention(HC): Notarised by Public Notary and apostille by the competent authority of such country. 

3. Residing outside his own country and the country where he resides is under the Hague Convention.

4. Option A: Notarised by a Public Notary and apostille by the competent authority of that foreign country. 

5. Option B: Attested by the Embassy of his Country of Origin at the place where he resides. 

6. Residing in his own country under Commonwealth Country (CW): Notarised by Public Notary.

Residing outside his own country and the country where he resides is under Commonwealth Country:

• Option A: Notarised by the Public Notary of that foreign country.

• Option B: Attested by the Embassy of his Country of Origin at the place where he resides.

• Is from a country that is outside the CommonWealth and also not a party to Hague Apostille Convention: Notarised by the Notary (Public) of such country and the certificate of Notary (Public) to be authenticated by a Diplomatic or Consular Officer. All proposed Directors have to submit a list of Indian Companies in which they are interested (i.e. holding 2% or more shares).

Procedure for Nidhi Company Registration in India

The registration process for a Nidhi Company in India involves several steps and compliance requirements. Here's a general overview of the procedure:

1. Minimum Requirements:

• Minimum of 7 shareholders and 3 directors (at least one director must be an Indian resident).

• Minimum paid-up equity capital of Rs. 5 lakhs.

• The company's objective must be to cultivate the habit of thrift and savings amongst its members, receiving deposits, and lending to its members only for mutual benefit.

2. Obtain Digital Signature Certificate (DSC):

• The first step is to obtain Digital Signature Certificates (DSC) for all the proposed directors and subscribers of the company. DSC is required for filing the online registration forms.

3. Director Identification Number (DIN):

• Each director must obtain a Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA) by filing Form DIR-3 online.

4. Name Reservation:

• Apply for the reservation of the company's name through the MCA portal. The proposed name should include "Nidhi Limited" at the end and comply with naming guidelines.

5. Drafting of Incorporation Documents:

• Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) of the Nidhi Company as per the format provided in the Companies Act, 2013.

6. Filing of Incorporation Forms:

• Once the name is approved, file the incorporation forms (SPICe Form INC-32) along with the MOA, AOA, and other necessary documents online on the MCA portal.

7. Payment of Fees:

• Pay the requisite fees for incorporation and stamp duty (if applicable) online through the MCA portal.

8. Verification and Approval:

• After submission of the forms and payment of fees, the Registrar of Companies (RoC) will verify the documents and information provided. If everything is in order, the RoC will issue the Certificate of Incorporation.

9. Post-Incorporation Formalities:

• Obtain the Certificate of Incorporation and PAN (Permanent Account Number) from the Income Tax Department.

• Open a bank account in the name of the Nidhi Company and deposit the minimum capital amount.

• Apply for Tax Deduction and Collection Account Number (TAN) for tax deduction purposes.

• Obtain GST registration if the company's turnover exceeds the prescribed threshold.

10. Compliance and Reporting:

• Ensure compliance with ongoing regulatory requirements, such as conducting regular board meetings, filing annual returns, maintaining statutory registers, etc., as per the Companies Act, 2013, and Nidhi Rules, 2014.

Annual Compliance of a Nidhi Company

Annual compliance for a Nidhi Company in India involves fulfilling various statutory and regulatory obligations on an annual basis to ensure legal adherence, maintain transparency, and uphold corporate governance standards. Here's an overview of the key components of annual compliance for a Nidhi Company:

1. Annual General Meeting (AGM):

• Hold an AGM within six months from the end of the financial year, typically by September 30th.

• During the AGM, shareholders approve financial statements, declare dividends, appoint auditors, and discuss other matters as per the agenda.

2. Annual Return Filing:

• File Form NDH-4 (Annual Return) with the Registrar of Companies (RoC) within 60 days from the date of the AGM.

• The annual return contains details of the company's shareholders, directors, financials, and other pertinent information.

3. Financial Statements Filing:

• File Form NDH-3 (Financial Statements) with the RoC within 30 days from the date of the AGM.

• Financial statements include the balance sheet, profit and loss account, auditor's report, and director's report.

4. Board Meetings:

• Conduct at least four board meetings in a calendar year with a gap of not more than 120 days between two consecutive meetings.

• Board meetings discuss company affairs, financial performance, strategic decisions, etc.

5. Appointment of Auditors:

• Appoint auditors within 30 days from the date of incorporation and hold their first AGM.

• Subsequently, auditors must be appointed at each AGM to audit the company's financial statements.

6. Maintenance of Statutory Registers and Records:

• Maintain various statutory registers and records as per the provisions of the Nidhi Rules, 2014. This includes registers of members, directors, shares, etc.

• Keep minutes of board meetings, general meetings, and resolutions passed by the company.

7. Income Tax Compliance:

• File income tax returns (ITR) and pay taxes on income earned by the company as per the provisions of the Income Tax Act, 1961.

• Ensure compliance with tax audit requirements and other tax-related provisions.

8. Goods and Services Tax (GST) Compliance:

• Register for GST if the company's turnover exceeds the prescribed threshold.

• Comply with GST laws, including filing GST returns and payment of GST on taxable supplies.

9. Other Regulatory Compliance:

• Comply with other applicable laws and regulations, including labour laws, environmental laws, intellectual property laws, etc., based on the company's activities and operations.

Event-Based Compliances of a Nidhi Company in India

These compliances are required to be filed only once during the incorporation process. Following is the list of event-based compliances:

1. Transfer of Shares.

2. Appointment or Resignation or Removal of Director.

3. Any change in the name of the Company.

4. Increase in the Authorised Capital of the Company.

5. Any changes in the Company’s objective.

6. Change in registered office address.

7. Any other changes that are event-based.

8. Appointment of the KMP (Key Managerial Personnel).

9. Increase in the authorized capital of the Company.

What are the Penalties for Non-Compliance?

It is mandatory to complete all the compliances for every Nidhi Company. Non-Compliance attracts penalties for the Nidhi Companies:

1. In case the Company doesn’t meet the compliance, the organisation & the concerned officers will be fined an amount up to Rs. 5000.

2. In the case of repetition of infringement, the company will be fined Rs. 500/day.