Nidhi Company Registration

Once the Nidhi Company is incorporated it must fulfill the following requirements: a) It must have at least 200 members/shareholders. b) Minimum Net Owned Fund should be Rs. 10 Lakhs. c) Unencumbered term deposit must be at least 10% of the term deposit. d) The ratio of Net Owned Fund to term deposit should not be less than 1:20.

The exclusive advantage which is offered by Nidhi Companies are: a) It is a single office institution governed exclusively by its members with no involvement of the third party. b) Provide loans at minimal interest rates and minimum documentation. c) Secured investments are guaranteed by such companies.

Yes, the Deposits with such companies are safe and secure because the Ministry of Corporate Affairs and Reserve Bank of India has framed rules and regulations to ensure the safety and security of Deposits. And the Nidhi Company compulsorily abide by the rules of Central Government.

The Nidhi Company uses the funds in lending to shareholders as per Nidhi Rules. It lends such money in the form of small loan for business and finance.

Any person who is above 18 years of age as per the standard age proof can become a member of the Nidhi Companies. The person desirous of becoming a member should have valid ID Proof and Address Proof.

A minor shall not be admitted as a member in a Nidhi company, But deposits may be accepted in the name of minor , if they are made by natural or legal guardian who is a member of the respective Nidhi.

Nidhi can provide loans to its members only after the members have given/ provided some securities like gold, silver jewelry or any type of financial securities against the loan.

Nidhi Companies are not allowed to do the following business: a) They are not allowed to start the business of chit funds, Insurance, Hire Purchase Finance, Leasing Finance and acquisition of shares issued by companies. b) Nidhi Company cannot issue securities such as preference shares, debentures etc. c) They are prohibited from opening any current account with its members. d) It cannot enter into partnership for doing lending and borrowing business. e) It is not allowed to acquire any other company.

The principle of mutual benefit has been to pool the savings from members and lend only to members and never have dealing with Nonmembers.

Nidhi are not expected to engage themselves in the business of Chit Fund, hire purchase, insurance or in any other business including investments in shares or debentures.

Nidhi shall not issue preference shares.

Every Nidhi shall, within a period of one year from the commencement of these rules, ensure that it has not less than two hundred members;

The Director shall be a member of Nidhi. Therefore, it is mandatory for director of Nidhi Company to hold shares.

The Director of a Nidhi shall hold office for a term up to ten consecutive years on the Board of Nidhi. The Director shall be eligible for re-appointment only after the expiration of two years of ceasing to be a Director.

Every Nidhi shall issue equity shares of the nominal value of not less than ten rupees each.

Every Nidhi shall allot to each deposit holder at least a minimum of ten equity shares or shares equivalent to one hundred rupees.

A Nidhi shall not accept deposits exceeding twenty times of its Net Owned Funds (NOF) as per its last audited financial statements.

A Nidhi shall not declare dividend exceeding twenty five per cent or such higher amount as may be specifically approved by the Regional Director for reasons to be recorded in writing.