NIDHI (National Initiative for Developing and Harnessing Innovations) Companies play a pivotal role in promoting savings and mutual support within local communities. As businesses seek to contribute to localized economic growth, registration of a Nidhi company becomes crucial for fostering financial discipline, gaining legal recognition, and building trust among members.
Nidhi Company is a type of Non-Banking Financial Company (NBFC), also known as a Mutual Benefit Finance Company. The purpose behind its formation is to borrow and lend money to its members (shareholders), thus inculcating the habits of thrift and saving in its members. These entities operate on the foundation of mutual benefit, where the community members both contribute and receive financial assistance. Unlike traditional banking institutions, they cannot accept deposits from the general public or engage in other financial activities. Since their dealings are limited to members only, they are exempted from core provisions of the RBI Act and other directions applicable to NBFCs. They are formed and governed by Section 406 of the Companies Act of 2013, the Companies (Nidhi Companies) Rules of 2014, and Chapter XXVI of the Companies Rules, 2014.
The registration of a Nidhi company is not merely a legal formality but a fundamental step to establish its legitimacy, credibility, and adherence to regulatory standards. Without registration, the company may encounter difficulties in discharging its functions effectively and may face legal challenges in conducting its financial activities. Seedling specializes in making this registration process quick and simple. Our team of experts understands the importance of Nidhi companies in local economic growth and guides companies in navigating the process. From preparing documents to working with authorities, we're your dependable partner in establishing Nidhi companies and supporting community-focused financial services.
Within a year after incorporation, the Nidhi Company must meet the following conditions:
If the Nidhi Company is unable to satisfy these criteria by the end of one year from commencement, it may request an extension from the Regional Director using Form NDH-2 within thirty days from the close of the first financial year. If the criteria is not met even after the second financial year, the company cannot accept any deposits from the start of the second financial year until it complies with the provisions, facing potential penalties if non-compliant.
Seedling serves as your reliable partner in navigating the intricate process of Nidhi Company registration in India. Acknowledging the complexities involved, we offer comprehensive assistance throughout the entire journey. Our services include aiding in obtaining Director Identification Number (DIN) and Digital Signature Certificate (DSC), crucial components of the registration process. We guide you through meticulous document submission, ensuring accuracy and adherence to regulatory requirements. Our expertise extends to assisting in the selection of company names that not only comply with all the applicable laws but also increase the probability of quick approval. Seedling stands out as one of the best online portals for registration in India by offering transparent pricing and a hand-holding approach to make the registration journey smooth and hassle-free for our clie
Make sure that the name you choose is not similar to any other previously registered company (whether it is a Private Limited, Limited Liability, or Public limited company). The name must be unique (not too generic or descriptive) and must end with “Nidhi Limited.” It should not violate the provisions of the Emblems and Names (Prevention of Improper Use) Act, 1950, or resemble any registered trademark. Try to avoid using abbreviations and adjectives to prevent rejection by the ROC.
On average, it can take 14 to 21 working days to get a Nidhi Company registered in India. This registration is subject to document approval and verification of the submitted details by the MCA.
The charges for winding up a Nidhi company vary depending on factors such as the company's capital, assets, liabilities, and the governing regulations. It is advisable to seek expert advice from a legal professional or a chartered accountant in order to ascertain the exact fees and procedures involved in the closure.