Let's distinguish Nidhi company from one person's company. Starting a business is difficult, and investing capital or funding in a company is the most challenging task in India. It is difficult to obtain a loan from a bank or other financial organisation in India without collateral. The simplest type of business that one individual can operate is a one-person company, in which the founder is personally accountable for all debts incurred by the business. However, the liability will be limited upto the share capital. The Nidhi Company, on the other hand, is a financial non-banking organization with a corporate structure that prioritizes lending and borrowing money among its members. An NBFC of the Nidhi company needs three directors and seven shareholders. To learn more about the Nidhi Company and a One Person Company, scroll down.
What is One Person Company?
A one-person company has just one person as a member, according to Section 2(62) of the Companies Act. Additionally, shareholders or subscribers to a business's memorandum of the organization are all that a firm has as members. An OPC is a corporation with just one stakeholder on the payroll.
These businesses typically exist when there is just one founder or promoter. Due to the many benefits OPCs provide, entrepreneurs who start a company prefer to form them over sole proprietorships.
Features of a One-Person Company
Here are some common characteristics of a one-person company:
Private company:
Section 3(1)(c) of the Companies Act states that a single individual may establish a company for any acceptable reason. OPCs are also known as private businesses.
Minimum one director:
OPCs must have a minimum one director, who must be a member. They are limited to a total of 15 directors.
Single-member:
Unlike other private corporations, OPCs are only permitted to have one shareholder or member.
Documents needed for online OPC registration
List of documents needed for One person company registration:
- Passport or PAN Card
- Passport for international citizens
- Updated gas or energy bill, a scanned copy of a licence or voter ID, a specimen signature, and a passport-sized photo
- One-Person Company Registration Procedure
Step 1: Apply for DSC
Firstly, obtain the suggested Director's Digital Signature Certificate (DSC), which calls for the following paperwork:
Address verification, a PAN card, an email ID, and a phone number
Step 2: Request a DIN
Using the Director Identification Number (DIN) of the proposed Director in the SPICe Form, along with the director's name and address evidence, is the next step after creating the Digital Signature Certificate (DSC). The option is only accessible to existing companies (Form DIR-3). It indicated that beginning in January 2018, the applicant was exempt from submitting Form DIR-3 individually. Now, up to three directors may apply for DIN via the SPICe form.
Step 3: Name Approval Application
Choosing a name for the corporation is the next stage in registering a one-person company. Within the Form SPICe+ 32 application, the names are often approved. If the name gets rejected, you must submit a new Form SPICe+ 32 application with a different name. We move on to the next phase once the MCA has approved the name.
Step 4: Required Documents
We must prepare the following documents, which are required to be submitted to the ROC:
The Memorandum of Association (MoA) states the objective that an organization follows or the nature of the business it incorporates.
The Articles of Association (AoA) are legal documents that outline the rules for how a company must conduct its business and describe the firm's mission.
Step 5: Filing of Forms
Using MCA, The DSC of the Director and the professional will be connected to the SPICe Form, SPICe-MOA, and SPICe-AOA, and all of these documents can be uploaded to the MCA site for approval. When a corporation is incorporated, an automatic process generates the TAN and Pan Number. You do not require to submit separate applications for obtaining a PAN Number and a TAN.
Step 6: The Certificate of Incorporation is allocated
The Registrar of Companies (ROC) will provide a Certificate of Incorporation after verification, at which point we can start our firm.
Checklist Registration of One-Person Companies:
- The minimum and maximum membership is one.
- It is required to appoint a nominee before incorporation.
- Form INC-3 must be used to obtain the nominee's consent.
- The name of OPC should be selected, following the 2014 Companies (Incorporation Rules) Act.
- A minimum authorized capital must be Rs. 1 lakh
- DSC of the proposed director
- Evidence of the OPC's registered office.
What is Nidhi Company?
Financial non-banking companies make up Nidhi Companies. Numerous firms require investments due to the ongoing growth of the industries as a result, Nidhi limited corporations came into existence to assist these businesses by providing them with simple loans and funding. Nidhi Limited Company offers all of the answers to companies with funding issues and makes it simple for its members to get funds.
Nidhi Company is currently the ideal approach to launch your lending business in India because it operates without a licence from the RBI. The Nidhi Company permits transactions between its members, including accepting deposits from members and lending funds to members. Nidhi companies must contain Nidhi Limited at the end of their names because they are registered as public companies.
Features of Nidhi Limited Company
Separate Legal Entity:
In this scenario, each director and shareholder is treated as a separate legal commodity, protecting the company from risky situations and financial losses thanks to a personal shield.
No RBI regulations:
The Nidhi company benefits from not needing RBI approval to launch its loan business because there are no RBI regulations in place. As a result, the company can start operating as soon as they register.
Minimum investment:
- The minimum investment required to establish a Nidhi firm is Rs. 5 lakhs.
- Documents for Nidhi Company Registration Online
- Nidhi company registration is also available online.
The following documents are necessary for online Nidhi company registration:
- PAN cards for every director
- Aadhar cards of all directors.
- A voter identification card or passport passport-sized photo and recent bank statements (latest)
- If you have a rented property, provide the owner's NoC, lease deed, or rent agreement."
- If you own a property, provide an electric bill, a phone bill, and a property receipt.
What steps are involved in forming a Nidhi Company?
The following steps should be followed to form a Nidhi Company:
Digital Signature Certificate:
The application requires obtaining the Director Identification Number (DIN) and Digital Signature Certificate (DSC) of each of the company's directors.
Name approval:
The words "Nidhi Limited" must be at the end of the company name. Therefore, the company name is approved as a Public Limited Company with the terms "Nidhi Limited" at the end.
Conflict of Interest (COI) filing:
The applicant is required to submit the COI. Forms INC-7, INC-22, and DIR-12 must be used to file this.
Members' information submission:
According to the registration requirements, the company must have 200 or more members at the time of application. Under MCA/ROC, the Nidhi board must get every member's details.
Conclusion
The Companies Act 2013 applies to both Nidhi Company and One Person Company. However, the Nidhi Company must also follow specific regulations set down by the RBI. The member is where these two businesses most frequently diverge. While One Person Companies can come into existence with just one member, Nidhi Companies need at least 200 members. The remaining requirements for incorporating both firms are nearly identical. While One Person Company is often a private company, Nidhi Company is a public company. Lawgical India can assist you with any questions about these two firms or their registration.
