Nidhi Company has been taken from the Hindi word ‘Nidhi’ means treasure. Nidhi company follow Companies Act, 2013.These companies are mainly formed for savings. Nidhi companies are also called the mutual benefit society.
Nidhi Company creates the habit of thrift and savings amongst its members. Members can receive deposits and they can lend as well for their mutual benefit.These companies are considered as the secured means of investment. In Nidhi company loans can be can be approved and deposits can be accepted between its members.
Provisions of Loan in Nidhi Company
Loans can be provided to its members.
There are certain limits on which can be provided
Sometimes loan against fixed deposits, the period of loan shall not exceed the unexpired period of the fixed deposits.
Nidhi Company comes from the Hindi word Nidhi which means “fund”. Nidhi companies are registered under Companies Act, 2013.These companies can be called a habit of savings between the members of the company. Company consist of investment structure consists of realigning funds within a growing group of the member who benefits from the returns at fixed duration.
Nidhi company is similar to NBFC. It refers to any mutual benefit by Ministry of corporate affairs. These companies have been incorporated with the aim of utilizing money in a best possible manner and savings amongst its members, receiving deposits from and lending to its members only for their mutual benefit. Nidhi companies are also called mutual benefit societies because their dealings are restricted only to the members.
Features of a Nidhi company
Benefits of Nidhi Company
Requirements to form a Nidhi Company
Registration process of a Nidhi Company?
Term and Conditions in Nidhi Company
According to the government law, Nidhi Company is governed by Nidhi rules.These companies are incorporated under the nature of a limited company. These comply with two rules one under Companies act, 2013 and Nidhi Rules 2014.Nidhi Company provides the benefit of the mutual fund, Permanent fund etc.
Nidhi companies are the limited companies registered under Companies Act, 2013.. The word “Nidhi” in Nidhi Company comes from a word which means “treasure”. It has been incorporated with the aim of- utilizing money in a best possible manner and savings amongst its members, receiving deposits from and lending to its members only for their mutual benefit. and compliance with the rules as prescribed by Central Government. Nidhi company is similar to NBFC.
They are known as mutual benefit societies because their dealings are restricted only to the members
Benefits of Nidhi Company
Why do people register with Nidhi Company?
It is the cheapest and easiest form of NBFC and can be easily formed. It requires minimum seven members including subscribers to incorporate a Nidhi Company. It shall have the word Nidhi Limited as a part of its name. Like for example XYZ Nidhi Limited.
Conditions need to be satisfied for registration of Nidhi Company
Beware of these points before making a nidhi company-
Nidhi Companies are also known Mutual Funds Benefits Company, Mutual Funds Benefits Societies or Benefit Funds. It deals with the contribution from and loans to its members only. As such they come under the Non-Banking Financial Companies (NBFC) category.
Nidhi Companies are formed to evolve the habit of savings and being thrifty among its members for mutual benefits.
Nidhi Companies are registered in India as Public Limited Companies and hence they go through a registration procedure. There are certain requirements to meet before a Nidhi Company can be registered.
Essential requirements for registration are:
Within a period of one year, Nidhi Limited Company must satisfy the following conditions:
It takes upto 45 days to register a Nidhi Limited Company following the Nidhi Company registration procedure.
There are certain extended scopes of services for Nidhi Company registration. They are as follows:
Nidhi is a Hindi word, which means finance or fund. So, Nidhi Company can be depicted as bank where only its members can deposit money or take loan. It is kind of mutual benefits society in the form of a company. Since Nidhi companies are registered as public limited companies; therefore, it has all the features of public limited companies such as limited liability of its members.
The main thrust to register Nidhi Company is to promote the saving habits among its members for their mutual benefits.
Since Nidhi Company is like a public limited company so most of the requirements are same as of public limited company.
So, let’s understand the process and basics requirement to register Nidhi Company in India.
Requirement to form Nidhi Companies:
Documents required to incorporate Nidhi Companies:
Following are the documents required for company incorporation for each director/ shareholder
Registration Process of Nidhi Company:
It is mandatory requirement to have DIN before becoming director in the Nidhi Company. DIN is unique identity number of every director whereas DSC is medium to sign the documents online. It is equivalent to physical signature.
The name of the Nidhi Company must be unique which shall not resemble with any other existing company or LLP. Apart from this, every Company incorporated as a “Nidhi” shall have the last words ‘Nidhi Limited’ as part of its name.
MOA and AOA are the main documents to incorporate any kinds of company in India. Therefore, these documents are carefully drafted to avoid any hurdle in incorporation process.
File the necessary forms with ROC to incorporate Nidhi Company. Once the government is satisfied with all the documents and other requirements, a certificate of Incorporation (COI) is issued to the applicant. COI is the conclusive evidence of company registration
For entering into the professional world every person wants to register their business just to have a legal existence. Registering your company would give a legal existence to your business or you can say a life of its own.
One of the essential requirements for every company is to have sufficient funds. Without having funds no company can survive for a long time. Similarly registering your business entity as a Nidhi Company would also require funds and now the question arises that from where Nidhi Company arrange such finance? To answer such question first you need to understand what actually the Nidhi Company is?
This article talks about the meaning of Nidhi Company, its requirements, how does it work, how does it arrange finance, what are the criteria’s and usefulness, filing and other statutory requirements with ROC and other relevant topics.
What is Nidhi Company?
Nidhi companies are the limited companies registered under Companies Act, 2013. The word “Nidhi” in Nidhi Company comes from a word which means “treasure”. It refers to any mutual profit society notified by the Central / Union Government as a Nidhi Company.
Basically Nidhi Company means a Company which has been incorporated with the aim of- utilizing money in a best possible manner and savings amongst its members, receiving deposits from and lending to its members only for their mutual benefit. and compliance with the rules as prescribed by Central Government. They are also known as mutual benefit societies because their dealings are restricted only to the members. Nidhi company is similar to NBFC. Around 80% of the Nidhi companies are situated in Tamil Nadu.
The team of Registrationwala helps you to know more about Nidhi Company and provide their best consultancy services regarding the same, which makes the process of incorporation of Nidhi Company much easier. To know more click on www.registrationwala.com.
To incorporate a Nidhi Company there should be minimum 3 directors and 7 shareholders, It shall be a Public Company having minimum paid up equity share capital of Rupees 5 lakh. It shall have the word Nidhi Limited as a part of its name. Like for example XYZ Nidhi Limited. If such requirement is not fulfilled then the same is not possible to incorporate.
The object of the Nidhi company should be only that of lending money, and taking deposits from its members for its mutual benefit only.
How to arrange finance?
Nidhi Company is one of the categories of NBFC’s or in other words, it is the cheapest and easiest form of NBFC as well. Also, it is very easy form to register and does not require much capital. Anybody can register a Nidhi Company with only 5 lakh minimum capital and with minimum of seven members.
Now if we talk about the funds for the Nidhi Company, it can be contributed solely from its members or shareholders or we can say Nidhi Company can arrange finance only through its members or shareholders. They are allowed to borrow from its members and lend to its members only. If you are registering Nidhi Company and you are dealing with public at large then this point might breaks your heart because as per law Nidhi Company can only deal with its members. In other words , it means that it can accept deposit and provide only to its members.
A Nidhi company shall not accept deposits exceeding 20 times of its net owned assets and also fixed deposits shall be accepted for a minimum period of 6 months. Maximum balance in a saving deposit account shall not exceed Rs. 100000/-
In this way, Nidhi Company can arrange finance.
Why to incorporate Nidhi Company?
Compliances after incorporation
After incorporation of Nidhi Company it needs to comply the following criteria within one year-
Here, *Net owned Funds = Paid up Equity share capital + Free reserves – Accumulated losses – Intangible Assets
The Nidhi -company is not found in many regions of the country because the purpose of Nidhi company is very much less and is to be created for only above said purposes.
Therefore the person who wants to start the company for the above said purpose than only should start a Nidhi company otherwise not.
Importance of Annual Filing
Company is a legal entity made up of association of…
Legal Requirements for Company Registration
Company incorporation is ideal process for every Business firm. It…
Maintenance of Minutes of a Company
Minutes is record of meeting or any official hearing in…