WHAT IS Nidhi Company?
A NIDHI company is one that belongs to non-banking Indian finance sector and is recognized under section 406 of the companies act 2013. Their core business is borrowing and lending money between their members. They are also known as Permanent fund, Mutual funds and Mutual benefit company. They are regulated by Ministry of Corporate Affairs.
NIDHI company registration requires minimum 3 members. All the NIDHI company’s incorporated shall have the last word as “Nidhi Limited” as a part of its name. Nidhi company is easy and economical to register.
Some requirements of Nidhi company:
Before incorporation:
- At least 7 shareholders
- At least 3 directors
- Minimum capital of 10 lacs
- DIN for all directors
After incorporation:
- Atleast 200 shareholders
- Net owned fund shall not be less than 10 lacs
- Unencumbered deposits of not less than 10% of the outstanding deposits
- Net owned funds to deposits ratio should be more than 1:2
Advantages
- Limited liability
- A member can borrow money at cheaper rates than bank.
- Encourages its members to save money.
- No external interference in the management
- Requires minimum documentation and formalities
- Investments are secured here
Disadvantages
- Only members deposit money.
- Availability of credit is restricted.
- Falls under RBI vigilance.
- Central government do not totally exempt it from regulatory framework.
FAQs
DOCUMENTS REQUIRED
- Self-attested copy of PAN card
- Self-attested copy of driving license/voter id/passport
- Aadhar card
- Self-attested copy of bank statement/telephone bill/electricitybill
- Passport sized photo graph
- Specimen signature certificate
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Nidhi Company Registration
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Nidhi Company Registration
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Nidhi Company Registration
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