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WHAT ARE THE DOCUMENTS REQUIRED TO FORM A NIDHI COMPANY?

WHAT ARE THE DOCUMENTS REQUIRED TO FORM A NIDHI COMPANY?

Introduction

YOU NEED TO KNOW WHAT ARE THE DOCUMENTS REQUIRED TO FORM A NIDHI COMPANY?

Document Required to form a Nidhi Company , you typically need documents such as the Memorandum of Association (MOA), Articles of Association (AOA), PAN card, address proof, identity proof, and photographs of directors, along with proof of registered office address. Additionally, you may require the director’s DIN (Director Identification Number) and DSC (Digital Signature Certificate). It’s advisable to consult with a legal professional or company registration service to ensure compliance with the specific requirements and regulations. Visitofficialwebsite

Key Characteristics of Nidhi Companies:

  • Membership-based: Nidhi companies have only members and no shareholders.
  • Core activities: Accepting deposits and providing loans to members.
  • Limited financial transactions: Transactions are limited to the members only.
  • Object of mutual benefit: Nidhi companies are formed for the mutual benefit of their members.
  • Limited operations: They are limited to specific areas and not pan-India operations.
  • Profits and dividends: Profits earned are distributed among members, mainly in the form of dividends.

Documents Required to Form a Nidhi Company:

Document Required  To form a Nidhi Company, you need to follow a series of steps and provide several documents. Here is a comprehensive list of documents and the steps involved:

Step 1: Name Approval

  • Application for Name Reservation (Form INC-1): You need to submit an application to the Registrar of Companies (RoC) to reserve the company name. The proposed name must include “Nidhi Limited” as part of the name.
 

Step 2: Application for Incorporation

  • Application for Incorporation (Form INC-32): Once the name is approved, you must file an application for incorporation with the RoC. The application includes details about the company’s registered office, subscribers, and directors.
 

Step 3: Memorandum of Association (MOA) and Articles of Association (AOA)

  • MOA and AOA: Prepare the MOA and AOA of the company. These documents outline the company’s objectives, rules, and internal regulations. The MOA and AOA are filed with the RoC as part of the incorporation documents.
 

Step 4: Directors and Subscribers

  • Director Identification Number (DIN): The proposed directors of the company must obtain a DIN. DIN is a unique identification number for directors, and it is obtained by filing Form DIR-3.

  • Subscriber Sheets: Each subscriber to the MOA and AOA must sign the documents, indicating their consent to become shareholders and directors of the company.

Step 5: Registered Office

  • Proof of Registered Office: Provide proof of the registered office address of the company. This may include a rental agreement or a sale deed in the name of the company, along with a no-objection certificate (NOC) from the property owner.
 

Step 6: Capital Requirement

  • Minimum Capital: Ensure that the company has a minimum paid-up capital of Rs. 5 lakhs.
 

Step 7: Statutory Declarations

  • Declaration by Professionals: Get declarations from a practicing Chartered Accountant, Cost Accountant, or Company Secretary verifying that all requirements of Nidhi Rules have been complied with.
 

Step 8: Consent Letters

  • Consent of Directors: Each director must provide consent to act as a director of the company.
 

Step 9: Declaration by Directors

  • Declaration by Directors (DIR-2): Directors must declare that they are not disqualified from being appointed as directors.
 

Step 10: Affidavit from Directors

  • Affidavit from Directors (Form INC-9): Directors must submit an affidavit declaring their consent to act as directors of the company.
 

Step 11: NOC from the Property Owner

  • NOC from the Property Owner: If the registered office is not owned by the company, you need an NOC from the property owner.
 

Step 12: Verification of Registered Office

  • Verification of Registered Office (Form INC-22): File Form INC-22 with the RoC to verify the registered office within 30 days of incorporation.
 

Step 13: Form INC-9

  • Form INC-9: File Form INC-9 with the RoC, providing a declaration of compliance with Nidhi Rules, 2014.
 

Step 14: Declaration of Disqualification

  • Declaration of Disqualification (DIR-8): Each director must submit a declaration of disqualification, stating that they are not disqualified from being directors.
 

Step 15: Application for PAN and TAN

  • PAN and TAN Application: Apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the company. These are required for tax compliance.
 

Step 16: Appointment of Auditors

  • Appointment of First Auditors: The company must appoint its first auditors within 30 days of incorporation.
 

Step 17: Bank Account Opening

  • Bank Account: Open a bank account in the name of the Nidhi Company. This is necessary for financial operations.

What is the preliminary process for the registration of a Nidhi company

The preliminary process for the registration of a Nidhi company in India includes the following steps:

  1. Minimum Requirements: Ensure that the company meets the minimum requirements to qualify as a Nidhi company, such as having at least 200 members within one year of incorporation, a minimum net owned fund of INR 10 lakhs, and complying with other criteria specified under the Companies Act, 2013.
 

2. Name Approval: Choose a unique name for the Nidhi company and submit it for approval to the Registrar of Companies (RoC). The name should include the term “Nidhi Limited” at the end, as per the guidelines provided.

3. Director Identification Number (DIN): Obtain DIN for all the proposed directors of the Nidhi company by filing Form DIR-3 with the MCA (Ministry of Corporate Affairs) along with the necessary documents.

4. Digital Signature Certificates (DSC): Obtain DSC for the proposed directors, as it is required for filing electronic forms and documents. DSC can be obtained from certified agencies or through online portals.

5. Memorandum and Articles of Association: Draft the Memorandum of Association (MOA) and Articles of Association (AOA) of the Nidhi company, which outline its objectives, rules, and regulations. These documents must comply with the provisions of the Companies Act, 2013.

6. Application for Incorporation: File Form INC-32 (SPICe) with the RoC to apply for the incorporation of the Nidhi company. Along with the form, submit the MOA, AOA, and other necessary documents, such as address proof, identity proof of directors, and declaration of compliance.

7. PAN and TAN Application: Apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the Nidhi company. These can be obtained from the Income Tax Department by submitting the relevant forms and documents.

8. Bank Account Opening: Open a bank account in the name of the Nidhi company and deposit the required minimum capital as specified by the RBI.

9. Post-Incorporation Compliance: After registration, ensure compliance with ongoing regulatory requirements, such as filing annual returns, conducting regular audits, and adhering to the guidelines issued by the RBI and the MCA.

What Is Nidhi Company Registration

Document Required to form a Nidhi Company

The Nidhi Company registration engages loaning cash and empowering investment funds between the individuals from the company. Nidhi Company is characterized under Section 406 of Companies Act, 2013 and Companies (Nidhi Companies) Rules, 2014. The Nidhi Companies is represented/administered by the Central Government, Reserve Bank of India (RBI) is engaged to give headings with respect to the issues identified with the acknowledgment of stores.

Legal Requirements

A) Initial Share Capital Requirement & shareholder requirement.

Least paid up offer capital required – 5 Lakh Rupees.

Minimum 3 Directors and 7 individuals as members.

B) Minimum Legal requirement need to be followed in first 12 months

Every Nidhi Company within the period of one year from the commencement, shall have

1. Minimum of 200 members (within 1 year )

2. Net fund of Rs. 10,00,000 (within 1 year )

3. An unencumbered term deposit is not less than 10% of outstanding deposits.

4. Compulsorily filing of Annual Accounts, Audit and Tax returns.

5. The ratio of net owned funds to the deposit must not be more than 1:20.

6. The net owned fund of the company should be Rs. 10 lakhs or more. Note that the Net owned fund is the sum of paid-up equity share capital and free reserved as reduced by the stored and intangible assets appearing in the last audited balance sheet.

Step-1 : DSC and DIN Application

The approved signatories, just as chiefs, will get DSC to sign structures carefully. The application is made before computerized signature specialist agents.DIN (Director Identification Number ) ought to be gotten by the chiefs of the Nidgi company.

Step-2 : Name reservation

Do check your proposed company name accessibility on MCA. Structure RUN is utilized to check the name accessibility and endorsement over MCA.

Step-3 : MOA and AOA

The object of the Nidhi Company will be drafted unmistakably. MOA (Memorandum of Association) and AOA (Article of Association) are vital reports of the company; consequently a specialist must define these archives. MOA and AOA are recorded with the Registrar of the Company.

Step-4 : Nidhi company registration application

For the Nidhi company registration E-structure SPICE 32 is required to be filled alongside vital reports. MOA and AOA are additionally joined as the connection in e-Form SPICE-32.

Step-5 : Certificate of incorporation

On receipt of the application for Nidhi company registration, Registrar of the company shall scrutinize it minutely. If the application is complete and correct in all respect, the registrar shall issue the certificate of incorporation.

Hope this helps you!!

What is the minimum requirement to the registration of a Nidhi company

A Nidhi Company is a type of Non-Banking Financial Company (NBFC) in India that primarily deals with accepting deposits and lending money to its members. To register a Nidhi Company, you must meet the following minimum requirements:

  1. Incorporation: Register the company as a public limited company under the Companies Act, 2013 with the Ministry of Corporate Affairs (MCA).
  2. Unique name: Choose a unique name for the company that includes the word “Nidhi Limited” as part of its name.
  3. Minimum capital: The company must have a minimum paid-up equity share capital of INR 5 lakhs (approximately $6,700).
  4. Minimum members: A Nidhi Company must have at least seven members (shareholders) and three directors at the time of incorporation.
  5. Resident directors: All directors must be Indian residents.
  6. DIN (Director Identification Number): Each director must have a valid DIN.
  7. DSC (Digital Signature Certificate): Obtain a DSC for each director, which is required for signing electronic documents.
  8. MOA (Memorandum of Association) and AOA (Articles of Association): Draft the MOA, which outlines the company’s objectives, and the AOA, which contains the rules and regulations governing the company’s operations.

Regulatory Framework for Nidhi Companies:

Nidhi Rules, 2014:

Nidhi companies are regulated by the Nidhi Rules, 2014, which provide the legal framework for their incorporation, operation, and compliance. These rules are framed under the Companies Act, 2013, and they lay down specific provisions for Nidhi companies’ functioning.

Companies Act, 2013:

The Companies Act, 2013, is the overarching legislation governing the formation and operation of companies in India. Nidhi companies are subject to the provisions of this Act as well, including requirements for company registration, director qualifications, and regulatory compliance.

How auriga accounting help you to define documents to form a nidhi company

Auriga Accounting, or any accounting software, is primarily designed for financial record-keeping and management. While it can be a valuable tool for tracking financial data related to the formation of a Nidhi Company in India, defining the specific documents required for incorporation involves legal, regulatory, and administrative aspects that go beyond the capabilities of accounting software. However, you can use accounting software in conjunction with legal and regulatory compliance software to facilitate the document preparation and management process. Here’s how accounting software, like Auriga Accounting, can assist in the process:

1. Financial Data Management:

Accounting software can help you manage and organize financial data related to the formation of a Nidhi Company. It can track expenses related to incorporation, monitor capital infusion, and maintain records of initial funding and paid-up capital.

2. Expense Tracking:

You can use the software to track and categorize expenses associated with the incorporation process. This is important for budgeting and financial planning.

3. Capital Management:

The software can help you keep a record of the company’s capital structure, which is essential for compliance with the minimum capital requirement for a Nidhi Company.

4. Financial Reporting:

Auriga Accounting and similar software can generate financial reports that summarize the financial status of the company, which is useful for internal management and compliance purposes.

5. Tax Compliance:

Accounting software can help ensure that the company is compliant with tax regulations. This includes generating and submitting tax-related documents and reports.

6. Audit Preparation:

The software can assist in preparing financial documents for audits, ensuring that the company’s financial records are in order.

7. Financial Projections:

Accounting software can help create financial projections, which may be required for regulatory purposes during the formation process.

However, when it comes to defining the specific legal and regulatory documents required for forming a Nidhi Company, you would typically need to work with legal professionals or company secretaries who are well-versed in Indian corporate law. These professionals can guide you through the process and ensure that all the necessary documents are prepared and filed correctly.

February 25, 2024

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