Nidhi Companies belong to the Non-banking financial companies structure. Registering a Nidhi Company allows a Nidhi to borrow from its members and lend to the members. To save money and invest them within the company. These deposits are then used by the company for its members (or shareholders), to provide loans or advances, and to acquire government-issued stocks/bonds/debentures/securities. It is regulated by the Ministry of Corporate Affairs, while the RBI monitors all its financial dealings.

The activities of a Nidhi Company do fall under the purview of Reserve Bank of India, as it is similar to an NBFC. However, as Nidhi Companies deal with shareholder-members money, RBI has exempted Nidhi Companies from the core provisions of the RBI and other regulations applicable to an NBFC.

Eligibility for NIDHI Company Registration

• Nidhi companies must have a minimum of 200 shareholders of the company. Only when a company has this minimum number of shareholders, they can apply for Nidhi company registration.
• The minimum paid-up share capital has been raised from 5 lakhs to 10 lakhs. This entire amount has to be paid up. However, the Net Owned Funds (NOF) must be increased to Rs 20 lakhs within a year of Nidhi Registration.
• The ratio between the net-owned funds and the deposits cannot be more than 1:20 for any companies which want to register for Nidhi Company. A ratio more than this is not accepted for a Nidhi company registration.
• The name of the company must always contain ‘Nidhi Limited’.

Benefits of Registration

Easy Formation: The formation of a Nidhi Company is done through a very simple process there are certain requirements such as a Minimum of 7 members is required. Out of which 3 will be appointed as directors and Simple and hassle-free documentation process.

Non-Compliance with RBI: Nidhi companies do not have to comply with the RBI regulations So, the Nidhi Company is free to inculcate its own rules.

Less Risk: The lending, borrowing or depositing of transactions are done by the members only, it lowers the financial risk taken by the company. In Nidhi companies.

Encourages Savings:
It encourages all its members to save money and encourages a thrifty lifestyle. Nidhi registration, after all, is a mutual benefit society wherein members can lend or borrow money and accept financial aid amongst them.

Documents Required

• Electricity Bill or any other utility bill for the address proof of the Registered Office
• Photograph of all the Directors and members
• PAN Card of all the Directors and members
• Residential Address Proof of all the Directors and members (Electricity Bill/Latest Bank Statement/Mobile Bill) (not older than 2 months)
• ID Proof of all the Directors and members (Aadhar Card/Driving License/Voter ID)