NIDHI COMPANY

           ("Nidhi" or "Mutual Benefit Society")

Section 406 Companies Act 2013 – Notified from 01/04/2014

                In this section, "Nidhi" or "Mutual Benefit Society" means a company which the Central Government may, by notification in the Official Gazette, declare to be a Nidhi or Mutual Benefit Society, as the case may be.

Nidhi” means a company which has been incorporated with the object of:-

-Cultivating the habit of thrift and savings amongst its members,

– receiving deposits from, and lending to, its members only, for their mutual benefit, and Which complies with rules of Chapter XXVI of Companies Rules, 2014.

Nidhi Company is a non-banking financial business structure that performs the functions of lending and borrowing of money within its members.

The main source of funding for a Nidhi company is a contribution from the members.

Nidhi Company isn’t required to receive the license from Reserve Bank of India (RBI), hence it is easy to form.

DEPOSITS FORM ITS MEMBERS:-

A Nidhi shall not accept deposits exceeding 20 times of its Net Owned Assets as per last audited financial statements.

The fixed deposits shall be accepted for a minimum period of 6 months and a maximum period of 60 months.

Recurring deposits shall be accepted for a minimum period of 12 months and a maximum period of 60 months.

In case of recurring deposits relating to mortgage loans, the maximum period of recurring deposits shall correspond to the repayment period of such loans granted by Nidhi.

The maximum balance in a savings deposit account at any given time qualifying for interest shall not exceed Rs.1,00,000/- and the interest shall not exceed 2% above the rate of interest payable to savings bank account by nationalized banks.

Interest for fixed and recurring deposits shall be at a rate not exceeding the maximum rate of interest prescribed by RBI which the NBFC can pay on their public deposits.

LOAN TO ITS’ MEMBERS

A Nidhi shall provide loans only to its members.  The loans given to a member shall be subject to the following limits:

Rs.2,00,000/- where the total amount of deposits from members is less than Rs.2 crores;

Rs.7,50,000/- where the total amount of deposits from its members more than Rs.2 crores but less than Rs.20 crores;

Rs.12,00,000/- where the total amount of deposits from its members is more than Rs.25 crores but less than Rs.50 crores;

Rs.15,00,000/- where the total amount of deposits from its members is more than Rs.50 crores.

BRANCHES:

A Nidhi may open branches only if it has earned net profits after tax continuously during the preceding three financial years.

The company may open up to 3 branches only within the district.

If it proposes to open more than 3 branches within the district or any branch outside the district, it shall obtain prior permission of the Regional Director and intimation is to be given to the Registrar about opening of every branch within 30 days of such opening.

                Nidhi Company Is Incorporated/Registeres As A Public Limited Company.

It is registered as a public company and should have “Nidhi Limited” as the last words of its name.

No. of persons required

1. Minimum Three Person for director
2. Minimum Seven Persons (as Promoters)

Note:-   It is mandatory for Nidhi Company to have at least 200 members, within one year of its incorporation.

Capital:-

Minimum Capital to register/incorporate a Nidhi Company is Five Lacs as Equity Shares. No preference shares can be issued by the Nidhi Company.

Documents Required

1. Pan Card
2. Coloured Passport size Photo
3. Residence Proof (Electricity bill/ mobile Bill/telephone Bill)
4. ID Proof of each members (Voter I.D./ Driving License/ Bank Statement)
5. Rent/lease /sale deed for registered office and utility bill of the same address

  PROCESS

1. Register DSC
2. DIN No.
3. Approval of name
4. Preparation of Moa/Aoa
5. FiLe with concerned ROC
6. Get Incorporation Certificate
7. Apply for Pan No. for company
8. Apply for Tan No. for company