Nidhi Company registration is intended to promote savings and fiscal responsibility among its members. The Hindi word “Nidhi” means “treasure” and is commonly used in the language. Nidhi Company is a type of financial company that is not a bank.
The Reserve Bank of India (RBI) has the authority to issue directions to Nidhi companies regarding their deposit acceptance policies.
Nidhi is Company is not subject to the main regulations that apply to NBFCs, as they are only focused on serving their shareholder/members. Nidhi Company is the ideal entity to receive a deposit and lend to a specific group of people.
How to Incorporate a Nidhi Company Online in India?
In order to incorporate Nidhi Company, you will need to gather the appropriate documents and follow the proper procedures.
Be sure to consult with an attorney if you have any questions. Registering a private limited company is a complicated process, but our team of experts can help you through it.
The Nidhi Company is authorized to borrow money from its members/subscribers, and will only loan money to its members/subscribers. The e nidhi Registration Process is very crucial in the Initial Stage.
The Mutual Benefit Society (MBS) is a type of organization that is designed to benefit its members and serve the common good. The Section-406 of the Indian Companies Act of 2013 and the Nidhi Rules, 2014 outline the procedures for registering a Nidhi company in India.
The operations of the Nidhi Companies fall under the authority of the RBI, which can provide guidance on how the NBFCs should handle their investments. Since Nidhi Companies handle only loans and deposits from their members, the Reserve Bank has given some exemptions to Nidhi companies.
Facts About Nidhi to Remember:-
- The Nidhi Rules of 2014 states that interest rates charged by Nidhi Companies can only be 20% per annum.
- This means that if a Nidhi Company’s balance falls below a certain threshold, the company can charge interest on that balance at a lower rate.
- To continue Nidhi membership, you must add at least 200 members/subscribers within 12 months of completing the registration process.
- Nidhi cannot issue debt instruments such as debentures, preference shares, or any other type of debt. Nidhi companies generally require some form of security when lending money, such as gold, FD&LIC insurance, or property.
- Maintaining accurate financial records is a requirement for annual audits and tax returns. It cannot accept deposits from anyone or give loans to any individual or entity.
- It is not permissible to conduct microfinance or vehicle finance businesses in India. Nidhi Companies cannot engage in any of the following business activities: leasing, running a chit fund, providing insurance, borrowing through hire purchase, or purchasing corporate securities.
- Nidhi, a Hindu goddess, is often depicted as a beautiful woman with a flowing dress and long hair. She is the goddess of wealth, fertility, and wisdom.
Quick Benefits of Nidhi Company:-
There are so many benefits of registering a Nidhi company.
The liability of members and directors is limited. Since the company is likely to suffer a loss and go through financial difficulties, the individual assets of Directors and members are not at risk of being seized by lenders, banks, and government.
Nidhi companies have a reputation for being more reliable than other organizations.
This is likely due to their higher quality standards and rigorous operational procedures. Nidhi Company is committed to helping its members save money.
One way it does this is by providing opportunities for savings. The intention of this behavior is to remain helpful to others, which is why it continues to be reciprocal.
The Nidhi Company offers lower rates on loans from its own coffers than from banks or other NBFCs. Getting a loan and accessing other services can be a complicated process.