About Nidhi Company
Nidhi Company is a kind of business entity that involves in Non-Banking Financial types of activities. You can see Nidhi Company only in India. Under section 406 of the Indian Companies Act, 2013, the Nidhi Company got the recognition. This type of company is ruled by the Ministry of Corporate Affairs of India.
What kind of Activity can accomplish a Nidhi Company?
You already know that Nidhi Company is responsible for Non-Banking financial transactions. But there is a catch. It cannot make any kinds of transaction with the general public. Only members of the Nidhi Company can lend or borrow money from the organization.
Other Names of Nidhi Company
Nidhi Company is also known as Benefit Fund, Mutual Benefit Fund, Permanent Fund and Mutual Benefit Company.
Features and Benefits of Nidhi Company
- Nidhi Company can be treated as a Public Limited Company.
- Nidhi Company is governed by the Nidhi Rules, 2014.
- It does not require RBI approval. But RBI can question it for the financial activities.
- It can help lower and middle class families/individuals to encourage small savings activities.
- Can provide loans against minimum documentation
- Investment in a Nidhi Company is very secure as it has a very complex membership structure.
- Nidhi Companies cannot involve in Chit Fund, Leasing Finance and Purchase finance related activities.
Pre-Requisites to Register a Nidhi Company?
If you are wishing to start a Nidhi Company, then you need to follow the below mentioned guidelines.
- Must have 200 members or shareholders, minimum.
- It must have minimum 10% of term deposits free from any kind of Debit or other kinds of financial liability.
- You must have minimum 5 lakhs (Rs 5,00,000) of NOF (Net Owned Fund) to start a Nidhi Company
- You need at least 3 directors and 7 shareholders to form it.
- The members of the Nidhi Company cannot
- Nidhi can give just rights shares and withdrew bit of rights issue can be allotted by the Board of Directors according to the current law.
- Nidhi members can not practice well beyond 10% of the total voting advantage.
- All things considered, A Nidhi Company must guarantee that the quantity of participation should include at least 200 investors
- Minors can also invest in Nidhi Company. But he/she needs to be under the legal guardianship of that Nidhi Company Member.
- All Nidhi Companies will have to issue minimum value of Rs10 as equity share.
How Can You Register a Nidhi Company?
You already know about the terms and conditions to Nidhi Company Registration. Now we are coming to the documentation process to register it. You need the below mentioned items:-
- Digital Signature (DSC) of 7 Directors
- Director Identification Number (DIN) of 3 Directors
- Articles of Association (AOA)
- Memorandum of Association (MOA)
- Pan of the Company
- Tan of the Company
- Incorporation Certificates
- ID Proof and Address Proof of the Directors
- You need to wait for 10-15 days to complete the registration process of your Nidhi Company.
