A financial firm that isn't a bank is known as a Nidhi Company (NBFC). It was established so that its members may lend and borrow money. It operates under the tenet of mutual benefit and instills in its members the value of saving money. Most of these businesses are based in southern India. A public firm that is. Its name should therefore end with "Nidhi Limited."
The following are some of the rules that Nidhi Companies must abide by when conducting their business.● Nidhi Companies cannot handle chit monies.
● It is forbidden for them to offer hire-purchase financing.
● They cannot manage leasing finance.
● It is forbidden for them to conduct insurance business.
● They are prohibited from transacting in securities.
● They are not permitted to accept deposits from non-members.
● They are prohibited from lending money to anyone outside their members.
To qualify for registration as a Nidhi Company, a few minimal prerequisites must be satisfied. These comprise the required share capital, net owned funds, number of members, number of shareholders, etc. The identical has been described in more depth below.● The business must be registered as a public limited company under the Companies Act.
● Stockholders: There must be at least seven shareholders.
● Number of Directors – The Company must have three or more directors.
● Equity Share Capital—At least 5 lakh rupees in equity share capital is needed.
● The Company needs to employ at least 200 individuals.
● At least 10 lakh rupees in net owned funds.
● The name of the business should end with "Nidhi Limited."● Lending and borrowing money must only be made among those who have signed up as members.
● Unencumbered term deposits should make up 10% or more of the corporation's total outstanding deposits.
● The Net Owned Funds to Deposits for the Company must be under 1:20.
● The Director Identification Numbers of all directors must be provided (DINs).
The files mentioned above and paperwork must be provided to register a business as a Nidhi Company.● A letter of approval (NOC) from the local landlord where the firm is registered.
● ID documents
● Members' address verification
● Images of the staff members of the business
● The business's DSC (Digital Signature Certificate)
● Copies of members' PAN cards
The Company must submit specific forms to be registered as a Nidhi Company. The following documents are provided.
● INC 9: The INC 9 form must be submitted by all signatories to the Memorandum of Association (MoA)
● DIR 2: All directors of the Company are required to complete the DIR 2 form.
By Nidhi company regulations 2014 rules 5 and 6, every subscriber is required to sign a declaration.
The Nidhi Company must meet the following needs within a year of registration as a NIDHI company.
They need to have 200 or more members.
Its minimum net owned funds amount must be $10,000.
Unencumbered term deposits should make up 10% or more of the total amount of deposits.
The ratio of net owned money to deposits cannot exceed 1:20.
If the Company satisfies the conditions above, it must file form NDH-1 within 90 days of incorporation, together with the necessary fees. A certified CA, CS, or CWA must sign a correctly accredited form.
A second financial year may be sought by submitting NDH-2 to the Regional Director within 30 days of the conclusion of the first financial year.
Creating a Nidhi Company: The Incorporation Process RUN facility for name approval The RUN facility on the MCA site is where applicants must input their name availability. All businesses that want to be incorporated as "Nidhis" must have "Nidhi Limited" in their name. The applicant's digital signature is no longer necessary for name availability.
The potential Directors, who may also be Nidhi Company Promoters or Applicants, must have a Class 2 DSC.
New SPICe32 form: After the name has been authorized, submit form SPICe 32 and the related attachments to incorporate the Nidhi Company:● MOA (Memorandum of Association) (Memorandum of Association)
● AOA (Articles of Association) (Articles of Association)
● Customer's PAN card number Evidence & Address The First Directors' Proof
● The rent document from the sale deed serves as proof of the registered office's address
● Newest utility bill for the registered office (gas, phone, electricity)
● NOC of the Registered Office Owner● First Director's Declaration and Assent on Form DIR-2
After approval, First Directors and Subscribers must self-declare on form INC-9 COI (Certificate of Incorporation). The incorporation certificate of Nidhi Company will take 15-20 days to arrive after all the required paperwork has been submitted, along with the registration fee and stamp duty. The certification of incorporation serves as evidence that all conditions precedent to incorporation has been satisfied.
You can gain access to several benefits by signing up as a Nidhi Company.
The following is a summary of these advantages.
Legal Status: A corporation's legal status is established by its registration as a Nidhi Company. Because it exists independently of its members, such a corporation can acquire or sell assets in its name.
Members have restricted liability: Members have restricted liability Depending on how much they invest or contribute, the members' liabilities will be constrained. Only their fair share in the firm will subject the members to liability. The Company's weaknesses cannot be used to pay off the members' debts.
Members can borrow money at lower interest rates from their provided funds.
A Nidhi Company is a non-banking finance company under the control of the national government. The primary purpose of a Nidhi Limited Firm Registration is to make it simple for the concerned Company's several stakeholders to borrow money from one another. Obtaining Nidhi Company Registration is straightforward and necessitates satisfying a few requirements. You can complete the process online.
We believe that this post has thoroughly discussed the benefits of working with Unitrust Nidhi Limited Company, which is run by QuickStart24 Group, and the requirements, paperwork, and registration process.
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Nidhi Company Setup shall contribute to make money and persist to keep providing, in not encumbered term deposits along with a Scheduled commercial bank (other than a co-operative bank or a regional rural bank), or even a post office deposit in its own name.