WHAT ARE NIDHIS?
The history of Nidhi companies, their unique features, mannerisms, etc. were initially described by the Viswanatha Shastri Committee in 1965. Later on many amendments were put forth by the James Raj Committee in 1975. The Central Government constituted a Committee known as the Sabanayagam Committee, which examined the various aspects of of the functioning of the Nidhi companies. And latest in 2005, the Expert Committee headed by Dr. Jamshed J. Irani suggested many alterations.
PREVAILING ASPECTS OF A NIDHI:
As per the definition in the Companies Act, 2013, “Nidhi” means a company which has been incorporated as a Nidhi with the object of cultivating the habit of thrift and savings amongst its members. In the exercising of powers under section 406 of the Companies Act, 2013, read with section 469 of the Companies Act, the Central Government issued the Nidhi Rules, 2014 which came into force on the first of April, 2014.
Requirements of incorporating a Nidhi and Public and Private LimitedCompany Registration in India Online:
Company has to be registered as a public limited company having minimum paid upequity share capital of five lakh rupees (preference shares not allowed to be issued). If preference shares are previously issued, they need to be redeemed.
- The MOA and AOA should not have any other object than cultivating the habit of thrift and savings for their mutual benefit.
- The name of a Nidhi Co. should end with ‘Nidhi Limited’ as its part like in case of Private Limited Company it end with Pvt. Ltd.
- The minimum number of member requirements of a Nidhi Company has to be fulfilled within a year of its commencement like in other Company Registration in India. Minimum members required are 200(no minor allowed as a member). Many other requirements need to be fulfilled before the incorporation of a Nidhi company as under:
-the net owned funds requirements should not be less than ten lakh rupees. Where, the net owned funds include the aggregate of paid up equity share capital and free reserves reduced by the accumulated losses and intangibles.
How to register a Nidhi Company?
The Minimum Requirements: One requires a minimum of seven people and minimum five lacs capital to start the company. The company has to fulfil up to 200 members within one year of incorporation, because, if these compliances are not followed up, then your Nidhi Company registration can be cancelled.
Director requirements: There needs to be minimum 3 directors and the directors can be from the shareholders also and vice versa. One can choose directors and shareholders of their choice.
Documents required for directors and shareholders:
- Copy of PAN Card
- Copy of Id proof(any- passport, voter id, adhaar card)
- Copy of Address proof(any- electricity bill, mobile bill, bank statements/passbook)
- Passport size photograph.
- Any other documents, if deemed fit.
Documents required for registered office:
- Own property: the most significant is to submit the ownership documents along with electricity bill and NOC.
- If rented property: Electricity bill for address proof along with the rent agreement and NOC.
Only the scanned documents are required.
After collecting all the prescribed documents, apply for DIN (Director Identification Number). These are used throughout the process. It is required to be mandatorily acquired by all directors of not only a Nidhi company but applicable to all other kinds of businesses.
Naming of the company: before proceeding, the selected name needs to be checked for its availability with the MCA(MINISTRY OF CORPORATE AFFAIRS)After the above procedure is fulfilled with, the name of the company needs to be selected and the words ‘NIDHI LIMITED’ needs to be added after the selected name. eg: XYZ NIDHI LIMITED.
After the ROC approves and incorporates the Nidhi company, one needs to apply for PAN and TAN. Business commencement certificate needs to be acquired from the Government. A bank account is usually the first step before commencing business activities. There is much-sophisticated requirements for the Nidhi Company. Hence, to avoid being in default, a person should always comply with official law of the state and do the business legally.
Process further simplified:
Various Returns required to be filed:
|NDH-1||To be filed within 90 days from the close of the first financial year for return of statutory compliances in accordance with Companies Rules,2014.|
|NDH-2||If the Company does not fulfil the above within 90 days it shall apply to the Regional Director along with the extension fee.|
|NDH-3||Filing of half yearly return within 30 days from the conclusion of each half year.|
THE MCA(Ministry of Corporate Affairs) has come up with a new and the simplified way of registering a company(including a Nidhi Company). The MCA has recently introduced an E-form under the SPICe(Simplified Proforma for Incorporating Company Electronically). This INC 32 can help incorporate a company with a single application. For more information regarding the SPICe procedure one can visit the MCA Company Registration portal.
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