STARTING A NIDHI COMPANY IN INDIA
Nidhi Companies is regulated by Secon 406 of Companies Act 2013 and Companies (Nidhi Companies) Rules, 2014 MEANING: Nidhi Company means a company which has been incorporated as a... NIDHI COMPANIES IS REGULATED BY SECON 406 OF COMPANIES ACT 2013 AND COMPANIES (NIDHI COMPANIES) RULES, 2014 MEANING: Nidhi Company means a company which has been incorporated as a public company with the object of-Culvang the habit of thri and savings amongst its members and receiving deposits from, and lending to, its members only, for their mutual benefit. OBJECT TO INCORPORATE NIDHI COMPANY: Nidhi Company is incorporated with following objectives: u2022tTo stimulate savings among its member u2022tTo lend Loans and receive money as deposits for the purpose from only its members. u2022tSince Nidhis come under NBFCs, the RBI is empowered to issue direcons to them in matters relang to their deposit acceptance acvies. However, since Nidhis deal with their shareholder-members only, RBI has exempted such notified firms from the provisions of the RBI Act and other directions applicable to NBFCs. APPLICABILITY: The Central Government made u2018Nidhi Rules, 2014u2019 for the purpose of carrying out the objectives of u2018Nidhiu2019 companies. These rules shall be applicable to u2022tEvery company which had been declared as a Nidhi or Mutual Benefits under Secon 620A(1)of Companies Act, 1956; u2022tEvery company functioning on the lines of a Nidhi company or Mutual benefit society but has either not applied for or has applied for and is awaiting nonfiction to be a Nidhi or Mutual Benefit Society under Secon 620A(1)of Companies Act, 1956; u2022tEvery company incorporated as a Nidhi pursuant to the provisions of Secon 406of the Companies Act, 2013. PRE-REGISTRATION REQUIREMENTS FOR REGISTERING A NIDHI COMPANY : Minimum Three Directors: Minimum three Directors are required to incorporate Nidhi Company. All this three director has to act as members of the company. Minimum Seven Members: Nidhi Company can be started with seven members. Out of which 3 are also to be appointed as directors. Minimum Capital Requirement: Nidhi Company as Public Limited Company Should have Capital of Rs.5,00,000/- Like Public Limited Company. No Preference Shares shall be issued. Object of the Company The objecve of such a firm would be to imbibe in the members a habit of this and saving and the services would only be restricted to its members;. The name of the company must have word as Nidhi Limited at the end. PROCEDURE FOR INCORPORATION OF NIDHI COMPANY : Get Digital Signature Certificate (DSC) of all seven members. Get Director Idenficaon number (DIN) of three Directors by using DSC. Suggest at least Six Company name. We will do a search for name availability. Apply to ROC for name approval with adding word Nidhi Limited. Once the name is approved by ROC File Incorporation document with ROC-like MOA AOA Consent of Director, Affidavit and declaration from directors etc. Once Incorporaon form is approved by ROC, ROC shall issue Certificate of Incorporation with PAN and TAN No. Requirement to Apply for DSC: All 7 members should have DSC u2022tPan Card Self Aested u2022tResidenal Proof Self Aested u2022tDully fill and sign DSC applicaon form. The requirement to Apply for DIN: (Minimum Three Directors are required for Incorporation of Nidhi Company) u2022tPhotograph of the Applicant u2013 To be Self-arrested. u2022tPAN u2013 To be Self-aested Mobile No. Email id. u2022tEducational Qualification u2022tOccupation u2022tProof of residence of applicant u2022tAddress proofs like passport, election (voter identy) card, raon card, driving license, electricity bill, telephone bill or bank account statement shall be attached and should be in the name of applicant ( shall not be later than 2 months). u2022tDSC of Individual. Requirement to Apply for Name Availability: u2022tSix Proposed name with the significance of Name u2022tAuthorized Capital- Minimum 5 Lacs u2022tJurisdicon of Registrar of Companies. u2022tMain Object to be pursued by Company Requirement to Apply for Incorporation of Nidhi Company: u2022tThe registered office address of Company. u2022tRecent Address proof with NOC from Owner. u2022tConsent from all Directors u2022tAffidavit and declaration from all directors and subscribers. TIME PERIOD: Time Required for Incorporation of Nidhi Company Shall be 20-30 days, depending on government approval. POST-REGISTRATION REQUIREMENTS FOR A NIDHI COMPANY : There are certain Compliances which Nidhi Company has to do are incorporation of Nidhi Company. Every Nidhi Company shall, within a period of one year from Incorporation of the company, ensure that it has Not Less than 200 Members: Aer incorporation, a Nidhi company must add at least 200 members to comply with this requirement of law. Further, it has to maintain this during the course of me. If the total members fall less than 200 at any me there are, it will leave the company at default. However, if the company is not able to reach the limit of 200 members, then you must apply for me within 30 days of closure of the financial year in Form NDH-2 with Regional Director. Net Owned Fund: Net owned funds shall be Rs.10,00,000/- or more (u2018Net owned fundsu2019 means the aggregate of paid up equity share capital and free reserved as reduced by the accumulated and intangible assets appearing in the last audited balance sheet). Ratio: The ratio of net owned funds to deposit shall be not more than 1:20. This ratio is very easy to understand. Suppose, if you have net owned funds of 10 lakh, then your total deposit limit would be INR 2 Crore. Deposit: Unencumbered term deposits of not less than 10% of the outstanding deposits as specified in Rule 14. Members restriction: A Nidhi Company shall not admit a body corporate or trust as a member. A minor shall not be admired as a member of Nidhi Company. But deposits may be accepted in the name of a minor if they are made by the natural or legal guardian who is a member of Nidhi GENERAL RESTRICTIONS: Rule 6 provides general restricons. Carry on the business of u2022tChit Fund, u2022tHire Purchase Finance, u2022tLeasing Finance, u2022tInsurance or Acquisition of Securities issued by any body corporate; Issue u2022tPreference Shares, u2022tDebentures or u2022tAny Other Debt Instrument by any name or in any form whatsoever; Open any Current Account with its members; Acquire another company by; u2022tPurchase of securities or u2022tControl the composition of the Board of Directors of any other company in any manner whatsoever or u2022tEnter into any arrangement for the change of its management, unless it has passed a special resolution in its general meeting and also obtained the previous approval of the Regional Director having jurisdiction over Nidhi; u2022tCarry on any business other than the business of borrowing or lending in its own name; u2022tAccept Deposits from or lend to any person, other than its members; u2022tPledge any of the assets lodged by its members as security; u2022tTake Deposits from or lend money to any body corporate; u2022tEnter into any Partnership Arrangement in its borrowing or lending acvies; u2022tIssue or cause to be issued any advertisement in any form for soliciting deposit; u2022tPay any brokerage or incentive for mobilizing deposits from members or for deployment of funds or the granting loans. Share capital allotment: Every Nidhi shall allot u2022tTo each deposit holder at least a minimum of 10 equity shares or shares equivalent to Rs.100/-. u2022tTo each savings account holder and a recurring deposit account holder at least 10 equity shares of Rs.10/-. Acceptance of deposits: u2022tA Nidhi shall not accept deposits exceeding 20 miles of its Net Owned Assets as per last audited financial statements. u2022tThe fixed deposits shall be accepted for a minimum period of 6 months and a maximum period of 60 months. u2022tRecurring deposits shall be accepted for a minimum period of 12 months and a maximum period of 60 months. u2022tIn case of recurring deposits, relating to mortgage loans, the maximum period of recurring deposits shall correspond to the repayment period of such loans granted by Nidhi. u2022tThe maximum balance in a savings deposit account at any given me qualifying for interest shall not exceed Rs.1,00,000/- and the interest shall not exceed 2% above the rate of interest payable to a savings bank account by nationalized banks. u2022tInterest for fixed and recurring deposits shall be at a rate not exceeding the maximum rate of interest prescribed by RBI which the NBFC can pay on their public deposits. u2022t Every Nidhi shall invest and continue to keep investing, in unencumbered term deposits with a scheduled commercial bank or post office deposits in its own name an amount which shall not be less than 10% of the deposits outstanding at the close of the business on the last working day of the second preceding month. In case of unforeseen commitments, temporary withdrawal may be permitted with the prior approval of the Regional Director for the purpose of repayment to depositors, subject to such conditions and me limit which may be specified by the Regional Director to ensure restoration of the prescribed limit of 10%
74 views • 6 slides