What is Nidhi Company?
If you are planning to open a business of your own and you want to help people just like you, creating a Nidhi Company is the best option for you. Plus, it would make you feel good and the business would flourish as well because it would beneficial for your client as well as for you. Allow me to explain further.
As per central government, Nidhi Company is a non-banking finance company. It is recognized under section 406 of the Companies Act and governed under Nidhi Rules 2014.
The sole purpose of a Nidhi Company is to ensure smooth processes of money lending between business people, mainly the top core personnel. To get into more detail, a Nidhi company basically receives money from a party of members as deposits or it lends them the money they require for any justifiable cause. The next main thing to talk about would be what sort of contracts or funds can the company provide? Well, there are a bunch of them that a Nidhi Company can provide to its clients.
Nidhi Company Registration
As we discussed earlier, a Nidhi company is a type of Non-banking Financial Company. RBI approval is not required for Nidhi Company Registration in India. Nidhi company is registered as a Public Company Registration.
- Apply for DSC and DIN
DSC stands for Digital Signature and DIN stands for Director Identification Number. The applicant needs to apply for DSC and DIN. DSC is an electronic signature required at the time of filing government forms online.
- Application for name approval
You need to file the RUN form for the name approval on the MCA portal. The name should be unique and matches with the company’s activity.
- MOA & AOA submission
Memorandum of Association i.e. INC-9 & Article and Association are filed at MCA Portal with INC- 32 and the subscription statement.
- Application for PAN, TAN & Bank Account
You also need to apply for Permanent Account Number, Tax Deduction, and Collection Account Number. PAN& TAN will be issued in 7 working days. After which you can submit the incorporation certificate.
- Incorporation Certificate
The Nidhi Company takes around 15-25 days to get incorporated. Once MCA is satisfied with all your submitted forms and documents it will issue incorporation of the certificate as a proof that the company has been created and also includes CIN number.
Documents Required for Nidhi Company Registration
For Nidhi Company Registration following list of documents is required by all the members or directors -
- A copy of PAN card, it should be self-attested so you do not worry about it being misused.
- A copy of your Voter’s card or Driver’s License. If you do not have these two then you can submit a copy of your Passport or Aadhar Card. They should also be self-attested.
- A copy of your Bank Statement. If for some reason you cannot provide that, you can provide a telephone, mobile or electricity bill. They also should be self-attested for safety protocols.
- A passport-size photograph.
These are a bunch of easy things you need to provide for your Nidhi Company registration. Now, let’s discuss the basic structure of how registered Nidhi Company is supposed to work for it to maintain its position in the market.