In this blog, there is detailed information on “What is a Nidhi Company?”, the Nidhi Company Registration Process, Documents required for Nidhi Company Registration Online, and other related information on Nidhi Company.
A Nidhi Company is a type of non-banking finance entity recognized under Section 406 of the Companies Act, 2013. Its main activity is borrowing and lending money among their members. Benefit funds, permanent funds, and Mutual Benefit Funds companies are all terms used to describe them. In India, the MCA (Ministry of Corporate Affairs) regulates these businesses and retains the authority to issue directions regarding deposit acceptance activities. The main goal of these organizations is to instill in their employees a sense of frugality and savings.
A Nidhi Company is a non-banking financial institution. It was created with the purpose of borrowing and lending money to its members. It instills the habit of saving in its members and operates on a mutual benefit premise. Nidhi Company does not require a license from the RBI (Reserve Bank of India), making it simple to establish. It is a public business that should have “Nidhi Limited” as the last word in its name.
Helps to save money
It urges all of its members to save money and lead economical lives. After all, a Nidhi company is a mutual benefit society in which members can give or borrow money and accept financial assistance from one another.
The process is less complicated
Dealing with banks or in an informal situation is far more complicated than borrowing and lending to known people, where the procedure is predetermined. When members of a Nidhi Company need money, they can unlock the potential of their money and benefit from cheaper interest rates.
Borrow money at a minimum rate
As a member, you can borrow money at a low-interest rate compared to what banks charge. This can be a significant benefit in times of need because various members of the mutual benefit society are likely to require funds at different periods, Also as stated earlier the process of borrowing money is speedier as compared to the banks and other third parties.
Note: In India, a company must have a registered office. Bank statements and utility bills should be no more than two months old. A utility bill, Rent Agreement or Sale Deed, and a No Objection Letter (NOC) from the landlord granting permission to use the office as a company’s registered office must also be presented.
A Nidhi company is registered as a Public Limited Company. Hence, the requirements for incorporation of a Nidhi company covered a minimum of three Directors and Seven Shareholders. However, the MOA of a Nidhi company must state that the primary objective of the proposed company is to nurture and promote a habit of thriftiness and savings among its members, and accept deposits from or lend loans only to its members, for the mutual benefits of them.
No, a Nidhi corporation cannot borrow money from a non-Nidhi company. It cannot lend to a non-member who is not a member in the same way.
No, you do not need to appear in person at our office or at any other office to register a Nidhi Company.
Two forms that need to be filed for Nidhi Company registration is Form INC 9, and Form DIR 2. All the directors need to file as per the declaration in rule 5 & 6 of Nidhi company rules, 2014.
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