Prerequisites For Forming a Nidhi Company

To establish a Nidhi Company, the following criteria must be met:

• The company must have the suffix “Nidhi Limited” in its name
• The company must be a Public Company.
• Minor, Body Corporate and a Trust cannot be admitted as members to Nidhi.
• The minimum paid-up share capital must be Rs. 5 lakh.
• The company cannot issue preference shares, in the case where such shares have been issued by the company prior to the commencement of the Act, the same shall be redeemed.
• The primary objective of the company must be to inculcate the habit of savings in its members.

Post Incorporation Requirements of a Nidhi Company

Within one year of incorporation, a Nidhi company must satisfy the following conditions:

• The minimum number of members must be 200.
• The Net owned funds must be Rs. 10 lakhs. (Net owned funds is the aggregate of paid-up capital and free reserves reduced by the accumulated and intangible assets as appearing in the last balance sheet.)
• The net owned funds and the deposits shall be in a ratio not exceeding 1: 20 that is Net Owned Funds: Deposits = 1:20.
• Unencumbered term deposits should be not less than 10 % of the outstanding deposits as specified in Rule 14 of Nidhi Rules 2014.

Registration Process of a Nidhi Company

To apply for registration the Nidhi Company must have a minimum of 7 members and 3 Directors. On fulfilling this condition the Nidhi Company can follow the below-mentioned process:

• Apply for Director Identification Number (DIN) and Digital Signature Certificate.
• Go for Name Approval by using Reserve Unique Name (RUN) Service of MCA.
• Prepare the Articles of Association and Memorandum of association according to the objects of the company and all other documents.
• File for Incorporation Form SPICe+.
• Apply for PAN and TAN.

For obtaining incorporation the following documents will be required:

• Copy of PAN Card of Directors and Shareholders.
• Identity proof for Directors and Shareholders like Voters ID, Passport, Driving License.
• Address proof of Directors and Shareholders like Bank statements, utility bills.
• Passport size photographs.
• Registered office – property proof. a) If the property is owned then – Utility Bill + Ownership document + NOC. b) If the property is rented – Utility bill + Rent Agreement +NOC.