What About Nidhi Company Registration?

To register a Nidhi Company in India, the following documents and information are typically required:

Directors' Documents:

• Identity Proof: Copy of PAN Card or Passport (for foreign nationals) of all proposed directors.
• Address Proof: Copy of Aadhaar Card, Voter ID, Passport, or Driving License as address proof for all proposed directors.
• Photograph: Recent passport-size photographs of all proposed directors.

Registered Office Documents:

• Ownership Proof: Copy of the Sale Deed, Property Tax Receipt, or any other document establishing the ownership of the registered office premises. If the premises are on rent, a copy of the Rental Agreement and a No Objection Certificate (NOC) from the owner.
• Address Proof: Copy of the latest utility bill (electricity bill, water bill, etc.) or the Municipal Corporation Khata Certificate in the name of the registered office premises. The utility bill should not be older than two months.

Other Documents:

• Memorandum of Association (MOA) and Articles of Association (AOA): The MOA and AOA must be drafted and submitted with the necessary clauses specific to Nidhi Companies.
• Nidhi Company Declaration: A declaration stating that the company will comply with the requirements of the Nidhi Rules, 2022, and will function in accordance with the objectives and regulations applicable to Nidhi Companies.

A Nidhi Company and a Non-Banking Financial Company (NBFC) are both types of financial institutions in India but have distinct differences. Here are the key differences between a Nidhi Company and an NBFC:

Nature of Operations:

• Nidhi Company: Nidhi Companies are primarily formed for cultivating the habit of thrift and savings among their members and providing credit facilities to them. They work on the principle of mutual benefit, with the primary objective of serving their members' financial needs.
• NBFC: NBFCs are financial institutions that engage in the business of loans and advances, acquisition of shares/stocks/bonds/debentures, leasing, hire-purchase, insurance, or any other financial services defined by the Reserve Bank of India (RBI). They operate in a broader spectrum of financial activities.

Regulatory Framework:

• Nidhi Company: Nidhi Companies are regulated by the Ministry of Corporate Affairs (MCA) under the Companies Act, 2013 and the Nidhi Rules, 2022. The primary regulatory authority for Nidhi Companies is the Registrar of Companies (RoC).
• NBFC: NBFCs are regulated by the Reserve Bank of India (RBI) under the Reserve Bank of India Act, 1934. The RBI sets the guidelines and regulations NBFCs must comply with, including capital adequacy requirements, licensing procedures, and prudential norms.

Membership:

• Nidhi Company: Nidhi Companies have members who contribute to the common pool of funds and collectively benefit from the financial services provided by the company. These members can be individuals or other corporate entities.
• NBFC: NBFCs do not have the concept of membership like Nidhi Companies. They operate as financial institutions that provide financial services to the general public.

External Shareholders:

• Nidhi Company: Nidhi Companies do not have external shareholders. The control and management of the company remain in the hands of its members, ensuring a more member-centric approach.
• NBFC: NBFCs can have external shareholders who invest in the company's equity. These shareholders have ownership rights and can participate in the decision-making process of the company.

Business Activities:

• Nidhi Company: Nidhi Companies primarily engaged in the acceptance of deposits and lending to their members. They operate at a local level, serving the financial needs of a specific community or region.
• NBFC: NBFCs engage in a wide range of financial activities, including lending, investment in securities, asset financing, leasing, hire-purchase, insurance, etc. They can operate at a national or even international level.