The laws and rules that govern the registration of a Nidhi Company is laid down under the Companies Act of 2013 as well as the Companies (Nidhi Companies) Rules of 2014. The term Nidhi actually means a Treasure, but when it is referred in a financial sector it usually refers to any of the mutually beneficial society which had been notified by the Central Government, and works in order to cultivate the aptitude of savings within their members. Therefore, the objectives of the Nidhi Company can be written down as:

1.      Cultivating the aptitude for thriving as well as savings within their members.

2.      Either lending or receiving the deposits from or to their members for the purpose of their mutual benefits, provided that they are in accordance with the Rules of Chapter XXVI of the Companies Rule of 2014.

When it comes to the deposit acceptance activities of the Nidhi Companies, it is the Reserve Bank of India who has the power to issue any directions that they feel necessary. The reason being that the Nidhi Companies comes under the one of the categories of the NBFC. But, the Nidhi Companies usually only deal with the share - holders, thus the Reserve Bank of India has itself exempted those notified firms from the RBI Act’s core provisions as well as the other directions which are applicable to the NBFCs. Since February 2013, the Reserve Bank of India has not released any regulatory framework for the Nidhi Companies.

Documents required for registering a Nidhi Company

The following documents have to be submitted in order to register a Nidhi Company:

1.      Either the ownership document or the rent or lease agreement as a proof that there is a registered place for conducting business activities.

2.      A signed copy from the owner of the No Objection Certificate.

3.      An Identity Proof

4.      Each of the member’s address proof

5.      Each of the member’s photo

6.      Each of the member’s PAN Card copy

7.      The Digital Signature Certificate (DSC)

8.      The Director’s Identification Number (DIN)

9.      The Company’s Memorandum of Association (MoA)

10.  The Company’s Article of Association (AoA)

In order to complete the registration, two forms have to be filed, first the INC 9 which has to be filed by all those members who have subscribed to the memorandum of association. Second is the Form DIR 2, which has to be filed by all the Directors of the company, where they have to sign the declaration in accordance with Rule 5 and 6 of the Nidhi Rules 2014.

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