All You Need to Know About Starting a Company
What is a Nidhi Company?
Nidhi Company is a type of Non-Banking Financial Company (NBFC). The basic reason to get it registered is to borrow and lend money to its members. It works on the principle of mutual benefit of its members by saving money. It does not require any license from RBI.
Permanent funds, mutual benefit funds, a mutual benefit company and benefit funds are examples of a Nidhi Company. The main idea behind creating a Nidhi Company is to borrow funds from members or lend to them for the mutual benefit of both parties. Chapter XXIV of Company Rules, 2014 has set upon the guidelines to be followed by a Nidhi Company.
Documents Required for Nidhi Company Registration
Document to be submitted by all directors: -
- Self-attested copy of PAN Card
- Self-attested copy of Driver's License/ Voter ID/ Aadhaar Card/Passport
- Self-attested copy of Bank Statement/ Telephone Bill/Mobile Bill/ Electricity Bill
- Passport-size Photograph
- Specimen Signature Certificate
Basics of a Nidhi Company
Regulated by MCA & RBI
Ministry of Corporate Affairs regulates the financial dealings and all the registration processes of a Nidhi company. All the activities conducted by the Nidhi Company related to the deposit acceptance are also come under the scanner of Reserve Bank of India.
Number of Members
A Nidhi Company have to employ 200 members within a year of its formation. In case of failure in doing so, it has to apply for permission to extend the time limit for doing the same. Three directors and seven stockholders must be appointed on commencement.
A Nidhi Company need to have paid up equity share capital of Rs. 5 lakhs on commencement. Moreover, 10% of the total deposit collected from members need to be in a fixed deposit in a nationalised bank.
Advantages of Nidhi Company
Minimum Rate to Borrow
As a member of Nidhi Company, rate of borrowing money form here is very less compared to borrowing from banks. It can be of most importance in times of need.
A Nidhi company inspires all its members to save money for times of need. After all, a Nidhi company is a mutual benefit society in which members can lend or borrow money and receive financial aid among them.
In Nidhi Company, borrowing and lending is less complicated than dealing with banks. A Nidhi Company permits its members to use their money efficiently with less complications.
Procedure for Nidhi Company Registration
- A minimum of three directors need to apply for a DSC which is compulsory to file the Nidhi company registration documents. You have to provide us some scanned documents for doing so. Our representative will fill the form in online mode.
- After applying for the DSC, we will apply for the company name and submit all the required documents. If all of your documents are in order, it will be done in 1 week.
FAQs on Nidhi Company