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WHAT ARE THE REQUIREMENT FOR REGISTRATION OF NIDHI COMPANY IN MUMBAI? File name: 10-1.jpg

What is a Nidhi Company?

Nidhi Company registration online in Mumbai:  A Nidhi Company is a type of non-banking financial institution (NBFC) in India that operates as a mutual benefit society. Its primary objective is to promote thrift, savings, and the efficient utilization of members’ financial resources. Nidhi Companies accept deposits from members and offer them loans at reasonable rates. These companies are distinct from traditional banks and other NBFCs as they primarily serve their members. Visitofficialwebsite

Key Features and Objectives

Nidhi Companies are characterized by the following features and objectives:

  • Encourage thrift and savings among members.
  • Provide loans to members at fair interest rates.
  • Facilitate the growth of a mutual benefit society.
  • Promote financial inclusion and serve economically disadvantaged members. Nidhi Company registration online in Mumbai:

Legal and Regulatory Framework

The registration and operation of Nidhi Companies are governed by the following key legal documents:

Companies Act, 2013:

  • The Companies Act, 2013, is the overarching law that governs the formation and functioning of companies in India. It provides the legal framework for various types of companies, including Nidhi Companies. Nidhi Company registration online in Mumbai:
 

Nidhi Rules, 2014:

  • The Nidhi Rules, 2014, are specific regulations that apply to Nidhi Companies. These rules outline the requirements, governance, and compliance obligations for Nidhi Companies to ensure their proper functioning and the protection of member interests.

Key Requirements for Registration in Mumbai

To register a Nidhi Company in Mumbai, you must adhere to the following key requirements:

Minimum Capital Requirement:

  • As per the Nidhi Rules, 2014, a Nidhi Company is required to have a minimum paid-up equity share capital of Rs. 10 lakhs.
 

Name Reservation:

  • The name of the Nidhi Company must include “Nidhi Limited” as the last words of its name to distinguish it as a Nidhi Company.
 

Object Clause:

  • The primary objective of the Nidhi Company should be the cultivation of thrift and savings among its members. Other secondary objectives can include receiving deposits and lending to members for their mutual benefit.
 

Management Structure:

  • Nidhi Companies are managed by a board of directors, which must have at least three directors but not more than seven.
  • Directors are elected by the members of the Nidhi Company in a general meeting.
 

Membership Criteria:

  • A Nidhi Company must have a minimum of 200 members within one year from the date of incorporation.
  • Each member should hold a minimum of 10 equity shares or a higher number as specified in the company’s articles of association.
  • The majority of the board of directors should consist of individual members of the company. Nidhi Company registration online in Mumbai:

Step-by-Step Registration Process

The registration process for a Nidhi Company in Mumbai involves the following steps:

Digital Signatures:

  • Obtain digital signatures for the proposed directors and key personnel. Digital signatures are required for signing and submitting electronic documents securely. Nidhi Company registration online in Mumbai:

Director Identification Number (DIN):

  • Directors of the Nidhi Company must obtain Director Identification Numbers (DIN) from the Ministry of Corporate Affairs (MCA) to legally represent the company.

Company Name Reservation:

  • Select an appropriate and unique name for the Nidhi Company. Ensure that it includes “Nidhi Limited” as the last words. The name should not infringe on existing trademarks. Nidhi Company registration online in Mumbai:

Drafting of Memorandum and Articles of Association:

  • Prepare the Memorandum of Association (MOA) and Articles of Association (AOA). These documents outline the objectives, powers, and regulations of the company and should comply with the Nidhi Rules, 2014.

Online Filing and Documentation:

  • File the necessary forms and documents with the Registrar of Companies (ROC). This includes Form INC-32 (SPICe), Form INC-33 (e-MOA), and Form INC-34 (e-AOA). These forms can be filled out and submitted online.

Certificate of Incorporation:

  • Upon successful review and approval of the documents, the ROC will issue a Certificate of Incorporation, signifying the legal existence of the Nidhi Company. Nidhi Company registration online in Mumbai:

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. Nidhi Company registration online in Mumbai:
  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. Nidhi Company registration online in Mumbai:
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Seven Types of Company Registrations in India

  1. Private Limited Company – Private limited companies are suitable for businesses that require registration as private entities. In this type of company, a group of shareholders distribute the liability amongst themselves to help protect their personal assets. Nidhi Company registration online in Mumbai:
 

2. Public Limited Company – A Public Limited Company is one in which members of the general public can buy shares. A Public Limited Company (PLC) is a voluntary membership organization formed under company law.

 

3. Partnerships Company – This type of company reflects sole proprietorship in several ways. However, the significant difference between sole proprietorship and partnership is the number of people involved.

 

4. Limited Liability Partnership – Popularly called an LLP, the limited liability partnership is a new type of company in India. It enjoys a separate legal status, helping distinguish between personal and business assets, and granting the entrepreneurs limited liability protection.

 

5. One Person Company – OPCs are the newest addition to the many forms of Companies Registration available in India, and they are ideal for small enterprises. The Companies Act of 2013 established the one-person company.

 

6. Sole Proprietorship – The sole proprietorship is nothing but a company run by a single person. Usually, in sole proprietorship companies, the owner is responsible for all profits or losses. It’s an individual company and pretty easy to set up the business.

 

7. Section 8 Company – Commonly called a non-profit organization, Section 8 companies work for charitable purposes. The purpose is in the lines of promoting arts, science, literature, education, caring for the needy, and protecting the environment.

What are the advantages and disadvantages of a Nidhi company

Here are some key advantages and disadvantages of a Nidhi company:

Advantages:

  1. Nidhi companies have less regulatory compliance compared to other NBFCs. They do not require a license from the RBI and only need to register with the MCA as per the Nidhi Rules, 2014.
  2. Nidhi companies aim to promote savings and thrift among middle and lower income groups by providing loans at lower interest rates.
  3. Nidhi companies operate only for the benefit of their members. Outsiders cannot invest in or avail credit from Nidhi companies.
  4. Nidhi companies can raise funds from their members, though the amount is limited due to their restricted membership. Nidhi Company registration online in Mumbai:
 

Disadvantages:

  1. The funds raised by Nidhi companies are limited since they can only accept deposits from members. This restricts their ability to provide loans.
  2. Though Nidhi companies have less compliance, they are still regulated and governed by the RBI and central government rules. They do not have complete regulatory exemption.
  3. Nidhi companies have to comply with deposit acceptance rules of the RBI which adds some regulatory burden.
  4. The central government issues directions and amendments to the Nidhi Rules from time to time which Nidhi companies have to follow. Nidhi Company registration online in Mumbai:

Post-Incorporation Compliance

After incorporating a Nidhi Company, the following compliance requirements and obligations must be met:

Nidhi Status Application:

  • Apply to the ROC for Nidhi status. The application should include a statement of compliance with the Nidhi Rules, 2014, a declaration of the minimum paid-up equity share capital, a statement indicating that the company has a minimum of 200 members, and an affidavit from the directors or promoters stating their compliance with the Nidhi Rules.
 

Branch Operations:

  • If the Nidhi Company intends to open branches, it must obtain approval from the Regional Director and meet specific financial performance criteria.
 

Annual Regulatory Filings:

  • Nidhi Companies are required to file annual returns (Form MGT-7) and financial statements (Form AOC-4) with the ROC within prescribed timelines. These statements should be audited by a chartered accountant.
 

Audit and Financial Reporting:

  • The financial statements must include balance sheets, profit and loss statements, and cash flow statements. These statements should provide a true and fair view of the company’s financial position.
 

Prohibition of Speculative Activities:

  • Nidhi Companies are prohibited from engaging in speculative activities or trading in shares or securities, except for government or other approved securities. 

How auriga accounting help you to registration nidhi company in mumbai

Auriga Accounting can be a valuable tool to assist you in registering a Nidhi Company in Mumbai. It streamlines the registration process, helps manage compliance, and ensures that you meet all necessary requirements and deadlines. Here’s how Auriga Accounting can help you with the registration of a Nidhi Company registration online in Mumbai:

1. Document Management:

Auriga Accounting provides a centralized platform for storing and managing all the necessary documents and forms required for Nidhi Company registration. It allows you to securely store and organize key documents, such as the Memorandum of Association, Articles of Association, and certificates. Nidhi Company registration online in Mumbai:

2. Compliance Tracking:

The software offers a compliance calendar that helps you keep track of important deadlines, ensuring that you meet all regulatory requirements. It sends notifications and reminders for annual filings, reserve fund contributions, and other compliance obligations.

3. Online Filing and Documentation:

Auriga Accounting can simplify the process of filling out the required forms and documents online. It provides step-by-step guidance for completing each form and performs real-time validation checks to ensure that all mandatory fields are correctly filled. This reduces errors and inaccuracies in the filing process.

4. Digital Signatures:

The software can help you manage digital signatures for the directors and key personnel involved in the registration process. It provides a secure environment for signing and submitting electronic documents, ensuring that all digital signatures comply with legal requirements.

5. Integration with Regulatory Updates:

Auriga Accounting integrates with regulatory databases to ensure that the forms and compliance requirements are always up to date. It provides automatic updates on changes to forms, regulations, and legal requirements, helping you stay compliant with the latest regulations.

6. Compliance Reminders and Alerts:

Auriga Accounting generates reminders and alerts for important updates, regulatory changes, and the status of your application. This ensures that you are aware of any changes or requirements related to the registration process.

7. Reporting and Analytics:

The software generates reports that provide insights into your compliance status, annual financial performance, and adherence to Nidhi Company registration online in Mumbai: These reports are valuable for assessing the company’s financial health and compliance.

8. Role-Based Access:

Auriga Accounting offers role-based access controls, ensuring that only authorized personnel can handle sensitive compliance data. This enhances security and control over the registration process.

9. Document Templates:

The software provides templates for creating specific documents required for Nidhi Company registration online in Mumbai: It includes templates for the Memorandum of Association, Articles of Association, and other necessary documents.

June 22, 2024

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