Nidhi Company Formation

Nidhi according to Section 620A of Compny Act 1956 means:

1.  In this section, ‘Nidhi ‘ or ‘ Mutual Benefit Society ‘ means a company which the Central Government may, by notification in the Official Gazette, declare to be a Nidhi or Mutual Benefit Society, as the case may be.
2. The Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act specified in the notification 356

• Shall not apply to any Nidhi or Mutual Benefit Society, or
• Shall apply to any Nidhi or Mutual Benefit Society with such exceptions, modifications and adaptations as may be specified in the notification.
•  A copy of every notification issued under sub-section (1) shall be laid as soon as may be after it is issued, before each House of Parliament.

Nidhi Company

Nidhi Company is a company registered under Companies Act and notified as a Nidhi Company by Central Government under Section 620-A of Companies Act. It is a non-banking finance company doing the business of lending and borrowing with its members or shareholders.
Nidhi is a company formed with the exclusive object of cultivating the habit of thrift, savings and functioning for the mutual benefit of members by receiving deposits only from individuals enrolled as members and by lending only to individuals, also enrolled as members, and which functions as per Notification and Guidelines prescribed by the DCA. The word Nidhi shall not form part of the name of any company, firm or individual engaged in borrowing and lending money without incorporation by DCA and such contravention will attract penal action
First you have to register your company under the Companies Act, 1956. Then you have to get approval from Registrar of Chits for Chits company incorporation. For NBFC you have to get prior approval from RBI to commence business.
For Incorporation of a “NIDHI Company” first a public limited company need to be to incorporated with a minimum authorised capital of Rs. 5,00,000/- and 3 resident Indian directors. After incorporation an application is filled with central government to notify this company as “NIDHI Company” through its official gazettes. A public limited company must has at least 500 members before filing application to Central Government for obtaining “Nidhi Company” status.
The Following documents/ information are required initially :

1.  PAN Card of proposed directors (self attested).
2. Proof of Address of Directors – Latest Bank Statement/ Telephone Bill within a period of 2 months/ Driving License/ Passport/ Voter identity Card/ etc (self attested).
3. Information about the Qualification of the proposed directors.
4. Passport size photograph of proposed directors (one plain).
5. Proposed 1+5 name for the new company.
6. Description about the main object of the company.
7. The Affidavit from the directors in non judicial stamp paper worth Rs 10/- and must be notarized (the format will be sent by us after receiving of the PAN card and address proof of the respective director).( Required the hard copy)
8. The Affidavit (which required at later stage after the order from ROC) from both the directors on two different stamp papers for not to accept deposits from public unless it complies with the applicable provision of Company’s Act. ( Required the hard copy)
9. The complete registered address of the company, if :
10. – own by the directors (NOC from director along with the consumption bill like electricity bill/ telephone bill/ etc)
11. – own by other than director (rent agreement, NOC along with consumption bill like electricity bill/ telephone bill/ etc from  owner).
12. Nearest Police Station to the registered address (Name & Address).
13. Subscription sheet to be filled by the respective directors in their own hand writing.
14. Copy of the Board resolution authorising for the formation of the  NIDHI company.
15.  Certificate to be signed by the auditor and the membership holding should not be less than 500.

After incorporation but before conversion into “NIDHI Company” the authorised capital of the company is to be raised from Rs.5,00,000/- to Rs.25,00,000/- and paid up capital from Rs.5,00,000/- to Rs.10,00,000/-.