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Nidhi Company Registration

About Nidhi Company

The feature that differentiates Nidhi Company from other companies, NBFCs etc. is that “Nidhi” deals with “deposits from” and “loans to” it’s members (shareholders) only, and works for the mutual benefits of it’s members. Accordingly, certain exemptions have been provided to these companies in respect of annual compliances and taxation.

Nidhi Companies in India are formed, governed, and regulated by Section 406 of the new Indian Companies Act of 2013, the Companies (Nidhi Companies) Rules of 2014, and the Chapter XXVI of the Companies Rules, 2014.

The objective of incorporating a Nidhi Company is to encourage savings amongst it’s members. And To fulfill this objective of cultivating the habit of saving amongst it’s members. Nidhi companies are allowed to take a deposit from and lend to the members only. In other words, the funds contributed to a Nidhi company come only from it’s members (shareholders) and are to be used only by the shareholders of the Nidhi Company.

The name “Nidhi” in Nidhi Company means “treasure” and it originates from the Hindi vocabulary.

Nidhi Company is a certain category of NBFC. Though not directly regulated by the RBI, still RBI has powers to issue directives for them related to their deposit acceptance activities. Moreover, because these “Nidhis” deal with their shareholder-members only, they have been exempted from the core provisions of the RBI Act and other directions applicable to NBFCs. Therefore, Nidhi Company is an ideal legal entity to take a deposit from and lend to a specific group of people.

Nidhi Company Registration

Section 406 of the Companies Act of 2013 and the Companies (Nidhi Companies) Rules of 2014 is comprising of all the provisions which are in relation to the “incorporation and governance of the Nidhi Companies in India”.

The guidelines and directives for the Nidhi Companies are also issued by the RBI. These are mainly related to financial activities and investments by companies including the NBFCs.

Because of “Nidhi Companies” being engaged in the business of deposits and loans by it’s members only, certain exemptions have been provided to these companies, by the RBI.

The interest charged on the loans under a Nidhi Company is quite reasonable. The purposes these are sought for, includes, manufacturing/renovation of houses or child’s education, etc. The loans are provided against security only.

The deposits under Nidhis do not earn much interest as compared to deposits in the organized banking sector.

All lending and borrowing of the Nidhi Companies is done by it’s members, exclusively. Hence, such companies are also referred to as Mutual Benefit Societies. Because they work for the mutual benefit and welfare of all members.

If you are looking to start a business in financing or loans in India, then Nidhi Company is the best option for it.

Key Features
Some points about the working of Nidhi Companies in India, as mentioned in Rule-6 of the “Nidhi Rules of 2014”, are significant to note:
  • It cannot carry any of the following kinds of transactions. Such as leasing finance, hire purchase finance, chit fund, insurance, or acquisition of securities issued by any corporation.
  • It cannot accept deposits from or give loans to some external individual or corporation.
  • A Nidhi Company is not empowered to issue preference shares, debentures, or some other debt instruments in any form.
  • Companies Act 2013 and Nidhi Rules 2014 act as the governing bodies, which regulate the functions and operations of a “Nidhi Company” in India.
  • A “Nidhi Company” does not come under the purview of RBI. Therefore, it does not need any license from RBI to operate a loan business.
  • It is not entitled to perform either a “vehicle finance business or microfinance business” in India.
  • Within 12 months of registration, the number of members must be at least 200.
  • A maximum interest rate of 20% p.a. (calculated by the reducing balance method) can be charged.
  • The maximum rate of interest that can be offered on savings deposit account shall not exceed 2% above the rate offered by Nationalised Banks.
  • Nidhi Company can accept FD, RD & savings and can earn an interest of 12.5% currently.
  • The rate of interest that can be offered on Fixed and Recurring Deposits shall not exceed the maximum rate of interest prescribed by RBI for the NBFCs to be offered on deposits. The maximum limit for the rate of interest for NBFCs is also applicable to the Nidhi companies.
  • It’s operations must be limited to the district level for the first 3 Years. After completion of 3 years, 3 offices can be set up within the same district. For expansion out of the district, prior approval from the “Regulator Director” is required.
  • It can only give loans against security. These securities may be Gold, Property, Fixed Deposits, Government Securities, or Life Insurance Certificates.
  • Unencumbered deposits (Deposits which aren’t offered as securities for any purpose) should not be less than 10 % of outstanding deposits.
  • Filing of Annual Accounts, Audit, and Tax Returns, in the proper format, is compulsory.
  • You can start your Nidhi Company at about Rs. 25,000 only.
Benefits of Starting a Nidhi Company

The central goal behind establishing a Nidhi Company is to encourage it’s members to save so that they can meet their financial requirements which arise from time to time. By being critical thinkers, they become self-sufficient and would meet all future expenses that may come up. And the benefit of getting a company registered as Nidhi doesn’t end there.

There are many more advantages to forming a Nidhi Company. Some are listed below:
  • Liability is Limited: Liability of Directors and shareholders of the Nidhi Company is limited. In case the company suffers from any loss and faces, financial distress in the course of it’s business activity, the personal assets of any of the Directors or members are not at risk of being seized by banks, creditors, and government.
  • Less Regulations: “Nidhi” companies are governed under the Nidhi Rules, 2014. The Central Government is the regulating authority, which controls it’s activities and operations. Guidelines imposed by the RBI on “Nidhis” are very few.
  • Better Credibility: “Nidhi” companies enjoy better credibility as opposed to any other member-based organizations like Trusts, Cooperative Societies or NGOs.
  • Better Option for Savings : The main purpose of a Nidhi Company’s incorporation is to encourage the habit of saving among the members of the Company. This is how it achieves the other goal of it’s registration of being mutually beneficial. The Nidhi Companies are to “lend and borrow money” to and from it’s shareholders/members only.
  • Easy Access of Public Funds: The loans from the Nidhi Company come at a cheaper rate than loans from banks and other NBFCs, for it’s shareholders. And the process of obtaining the loan and customized services are much more convenient and quicker.
  • Micro Banking: Nidhis provide banking services to the remote and rural public of India which still is based in far-off locations and is, hence, devoid of accessing finance from national banks and NBFCs.
  • It acts as a “Better Credit Co-operative Society”: Nidhi Company is a close substitute for credit co-operative society. And, therefore, more preferred by the small financer. Once a Nidhi company has been registered, the members can avail of all the benefit’s of a credit co-operative society.
  • Simple Processing: Borrowing and lending to known persons, belonging to the same group, is much less complicated than dealing with banks, where the procedure is impersonal and fixed.
  • Easy Registration Process: The process to register a “Nidhi Company” with Maheswari Consultancy is quite simple and transparent. You don’t need to take any license from RBI. You just have to incorporate your company as a public limited one with the MCA.
  • Single Regulatory Body: After the Amendment in Companies act 2013, Nidhi Companies are overseen by Nidhi Company Rules.
  • Low Capital Requirement: Ministry of Corporate Affairs (MCA) commands the minimum capital requirement of Rs.5 lakhs for the incorporation of a “Nidhi”. And, within 1-year, the capital has to be raised to at least Rs.10 lakhs. The Fees, DIN, DSC & Other Expenses are approx. Rs.25-30,000. These include Government fees that differ from State to State.
  • Fulfilling the needs of Lower & Middle-income groups: Nidhi Companies play an important role in meeting the needs of lower and middle-income groups by providing them financial help without complex formalities and documentation.
  • Easier Eligible: People getting minimum wages and belonging to lower strata are usually unable to take loans from traditional banks because of their high eligibility criteria. For them, Nidhi Company is a good option to obtain finance because of fewer conditions.
  • No External Involvement: Nidhi Companies take funds from their members and further provides loans to their members only. All transactions are done within this group only. So, no external factors are affecting the working of these companies. The investors/members themselves oversee the operations of the company.
  • Separate Entity: Nidhi Company is a separate legal entity that can acquire assets and incur debts in it’s own name.
Requirements for a “Nidhi Company Incorporation”

Given below are the essential conditions that must be met with for registering or operating a Nidhi Company.

Requirement before Registration
  • Minimum number of shareholders or members – 7
  • Minimum number of Directors -3
  • The minimum capital requirement is of Rs. 5 lakhs
  • DIN for Directors
  • Minimum 3 Directors.
  • No Preference Shares shall be issued.
  • The objective of the company shall be to cultivate the habit of saving by “receiving deposits” from and “lending to” it’s members only for their mutual benefit.
Requirement after Registration
  • By the end of the 1st year, the number of members or shareholders of the Nidhi Company must be 200 at least.
  • NOF should be more than Rs. 10 lakhs.
  • The ratio for NOF to Deposit should be more than 1:20.
  • Unencumbered deposits should exceed 10 % of outstanding deposits.
Procedure for Nidhi Company Registration

Though the process of registering a Nidhi Company is simple, still, assistance from a professional is advised for the completion of various complex forms and filing them within time. Moreover, the government portals and language are a bit on the difficult side, too.

And Maheswari Consultancy is an expert in Nidhi Company Incorporations, with over 7 years of experience in the field and has successfully registered more than 500 Nidhi Companies. Our operations are spread all over India.

Step 1: Applying for DIN and DSC
First, the Directors of the Nidhi company are to apply for DIN (Director’s Identification Number) and DSC (Digital Signature Certificate). DIN is issued by the MCA and DSC is a digital signature used for all e-filing processes. This step can be skipped for the Director who already has DIN and DSC.
Step 2: Name Approval
Now, you need to choose and suggest 3 different names to the MCA for your Nidhi Company. Out of these 3 names, only one will be accepted for your Company by the MCA. The proposed names must be unique and not matching to the names of other already registered companies. As per Rule 8 of the Company Act. The approved name will remain valid for 20 days only.
Step 3: MoA & AoA (Memorandum of Association) and AoA (Articles of Association).
Association) and AoA (Articles of Association). These must mention the main objective of incorporating a Nidhi company as a charity. The MoA and AoA are to be filed to the ROC (Registrar of Companies) with the subscription statement.
Step 4: Certificate of Incorporation (CIN)
It takes between 15-25 days to form a Nidhi company and get the incorporation certificate. This certificate declares that a company has been created and it mentions the company identification number (CIN) as well.
Step 5: PAN, TAN and Bank Account
Lastly, you need to apply for both “PAN and TAN”. The PAN and TAN are usually received within 7 working days. Later, you have to get a bank account opened by submitting the Certificate of Incorporation, MoA, AoA, and PAN to the bank.
Why Choose Maheswari Consultancy

Get the edge over others with a highly qualified team of professionals at Maheswari Consultancy. And get highly ranked professional services with full customer satisfaction. We assist with each step of a Nidhi company registration so that you can concentrate on your business.

  • We get companies registered anywhere in India
  • Experts are available 24×7
  • Fixed and Affordable Fee
  • No Hidden Cost means No Last-Minute Surprises
  • 20+ Experienced & Senior CAs & CS
  • India’s Leading Online Portal for Company Formation
Documents Required
  • Passport Sized photographs of all the directors.
  • ID proof of all the designated directors and shareholders. (PAN card and Passport are valid).
  • Address proof of all the directors and members (Ration Card, Aadhaar Card, Passport, Voter ID, and Utility Bill – electricity/water/mobile).
  • Address Proof of the Company. Make sure that the address proof is not older than 2 months.
  • Copy of the Property papers (if the property is owned).
  • NOC (No-Objection-Certificate) from the owner (if the property is rented).
Compliances for Nidhi Company
  • NDH-1 Form: A Nidhi Company has to submit the list of members within 90 days at the end of every financial year, in this Form.
  • NDH-2 Form: It can request MCA for an extension in this Form, in case it has not been able to add 200 members in it’s first financial year.
  • NDH-3 Form: Other than the above NDH-1 Form, a half-yearly return is also required to be filed in NDH-3 Form.
  • Annual Returns with ROC: The Nidhi Company has to file it’s Annual Returns with MCA through Form MGT-7.
  • Profit & Loss Statement and Balance sheet: The financial statements and other related documents are to be submitted, annually, in Form AOC-4.
  • Income Tax Returns: Nidhi Company, like all other businesses, must file it’s Annual Income Tax Returns by 30th September of the following financial year.
Deposits & Loans

Here we understand the rules and regulations which govern “the loan and deposit” aspects under Nidhi Company.

Deposits under Nidhi Company
  • There are 3 types of deposits, which a Nidhi can accept. These are Savings, Fixed Deposit (FD), Recurring Deposit.
  • Nidhi can pay a maximum interest of up to 12.5% on FD & RD and 6% on a savings account.
  • Nidhi can deposit up to 20 times the funds invested.
Loans from Nidhi Company
  • 3 types of securities can be accepted for loans on offer by Nidhi Companies. Loans can be provided against Gold, Property, Others (LIC, FD, etc.).
  • A Nidhi Company cannot engage in the business of microfinance but can lend at up to 20% interest against security.
  • It can take legal action if a member fails to repay any sum of money.
Restrictions on Nidhi Company

Though the sole purpose of Nidhi companies is taking up non-banking financial activities, they are prohibited to perform those transactions that may involve external factors, such as:

  • Advertise themselves to invite deposits,
  • Chit funds,
  • Leasing Finance,
  • Hire-Purchase finances,
  • Lotteries,
  • Sell, pledge or mortgage the assets kept with it as security for a loan,
  • Getting into a partnership for carrying out lending and borrowing activities,
  • Taking deposits or lending funds to someone other than its shareholders,
  • Issue preference shares, debentures or any other debt instruments,
  • Issue equity shares of the nominal value of over Rs. 10/- each,
  • Provide it’s deposit holders equity shares which are more than 10 in number and the value of the shares must be more than Rs.100/-,
  • Open a current account with it’s members (though it is allowed to open a Savings Account),
  • Lend to or take a deposit from a corporate,
  • Pay commission, fee or incentive for mobilizing deposits,
  • Carry on any other business than borrowing and lending to its members,
  • Hire a Purchase Financer,
  • Pay any brokerage for granting a loan to its members.
What is included in Our Nidhi Company Registration Package
DIN for 3 Directors
Digital Signature For 3 Directors
Name search & approval
MOA/AOA
Registration Fees
Company Pan Card
Why Choose Maheswari Consultancy
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Frequently Asked Questions

The Trademark Registration is registering of visual symbols which can be a word, name, device, label, digits, etc. Trademark registration in India helps the candidate or the trademark owner to safeguard his logo or trademark. Trademark registration also helps to evade duplication within the trademarks.

The easy way to get trademark registration done, involves the first step as “selecting a name then do a trademark search, after that file an application for the trademark registration”. Then fill the required documents like the name of the trademark or address. Then the application is examined after that the trademark is published in the Indian Trade Mark Journals. Lastly, the issuance of the trademark registration certificate.

The cost of registering trademarks starts from Rs. 6270/-

The process to get trademark registration:
  • Step 1: The first step is the choice of a trademark.
  • Step 2: The applicant must search the trademark records registry and assures that the proposed trademark does not match or the same to the registered mark.
  • Step 3: The search can be done online or by the trademark office.
  • Step 4: It is advisable to discuss an experienced lawyer as they are well-versed in their profession and are being prepared to conduct an exhaustive search.

Every applicant including corporations will have to give the following documents to get a trademark registered: – “Address proof of the person or company registering for the trademark, a copy of the logo, certificate of partnership deed and ID proof of the person registering for the trademark”.

Trademark infringement is basically the illegal use of a trademark or service mark linked to goods and services.

Trademark registrations are unique to the goods or services they describe. The registrations can be product or service-specific. Also, they are made under a Class of goods or services they signify. The trademark registration will, hence, be valid for the whole class of goods or services it describes.

Yes, the authorities mandate it for applicants to check all the documents they submit including the application for trademark registration by applying a Class III Digital signature. Our experts will help you e-verify all the documents in the correct way.

The registered trademark is valid for only 10 years from the date of filing of an application. After that one needs to apply for trademark renewal.

Symbol “TM” can be applied after filing of a trademark application. After registering a trademark a symbol “R” must be used. The ® symbol may only be used in connection with the goods and services mentioned on the registration certificate.

There is no limitation for anyone to apply for a trademark registration in India. Any individual, a foreign company, society or trust, partnership firm, LLP or private limited company, etc anyone can apply.

The trademark application can be filed as a multiclass application or as a separate single class.

The Trademark Registry has classified goods and services under 45 classes. Your application must mention the class/classes of the goods/services. The trademark would be registered under those classes only.

It is valid for a limited period of time i.e. for 10 years. But it is renewable indefinitely. You just need to pay the fee for trademark renewal every time.

After the application is registered with the government, a TM number is assigned by th trademark department within 1-2 days of submission of application. After this, you can use TM with your brand.

A trademark is an intellectual property which is being assigned to a word or logo but on another hand, copyright assures you the protection for your unique content such as books, music, videos, songs or even software.

You need to produce identity proof in case of trademark registration in India. (In case of individuality).While on another hand you need to produce company incorporation documents if the entity is a company.

No! The registered trademark under Trademark Act 2000 is only valid in India. But in few other countries, it can be used as a base for registering the trademark in those countries.

Company or domain registration will not protect your brand identity. To protect your company’s identity, you need to get trademark registration.

Logo registration in India is done by Maheswari Consultancy which provides trademark application services across India in all cities. We have done trademark registration in Mumbai, Delhi, Gurgaon, Noida, Bangalore, Chennai, Hyderabad, Ahmadabad, Kolkata, Surat, Pune, Jaipur, Lucknow, Kanpur, Nagpur and other Indian cities.

In order to understand trademark name search, you can kindly refer this link https://www.Maheswari Consultancy.com/blog/check-trademark-application-status/. Maheswari Consultancy also acts as a trademark checker to help their customers to create a unique logo for themselves. So, you can easily register a logo and get your TM number online.
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