The objective of incorporating a Nidhi Company is to encourage savings as well as frugality amongst its members. To fulfill this objective of cultivating the habit of saving and thrift amongst its members. Nidhi companies are allowed to take a deposit from and lend to the members only. Nidhi Company is a certain category of NBFC. Though not directly regulated by the RBI, still RBI has powers to issue directives for them related to their deposit acceptance activities. Moreover, because these Nidhis deal with their shareholder-members only, they have been exempted from the core provisions of the RBI Act and other directions applicable to NBFCs. It is an ideal legal entity to take a deposit from and lend to a specific group of people.
The guidelines and directives for the Nidhi Companies are also issued by the RBI. These are mainly related to financial activities and investments by companies including the NBFCs. The interest charged at the loans under a Nidhi Company is quite reasonable. The purposes these are sought are, generally, manufacturing / renovation of houses or child’s education, etc. The loans are provided against security only. The deposits under Nidhis do not earn much interest as compared to deposits in the organized banking sector. These are also referred to as Mutual Benefit Societies. Because they work for the mutual benefit and welfare of all members.
Characteristic of Nidhi Company
The basic Characteristic of Nidhi Company are:
- Minimum number of shareholders/ subscribers or members – 7
- Minimum number of Directors -3
- Shareholders and Directors can be same person
- The minimum capital requirement is of Rs. 5 lakhs
- DIN for all Directors
- Minimum 3 Directors.
- No Preference Shares shall be issued.
- The objective of the company shall be cultivating the habit of saving by receiving deposits from and lending to its members only for their mutual benefits.
After Incorporation
- By the end of the 1st year, the number of members or shareholders of the Nidhi Company must be 200 at least.
- NOF should be more than Rs. 10 lakhs.
- The ratio for NOF to Deposit should be more than 1:20.
- Unencumbered deposits should exceed 10 % of outstanding deposits.
Benefits of Nidhi Company
Following are the benefits of forming a Nidhi Company
- Liability is Limited
- Less Regulations
- Better Credibility: Nidhi companies enjoy better credibility as opposed to any other members based organizations like Trusts, Cooperative Societies or NGOs.
- Better Option for Savings
- Easy Access of Public Funds
- Ease of Fund
- Micro Banking
- Better Credit Co-operative Society
- Simple Processing
- Easy Registration Process
- Single Regulatory Body.
- Low Capital Requirement
- Fulfilling the needs of Lower & Middle-income groups
- Easier Eligible
- No External Involvement
- Separate Entity
Services Offered by Us
Following are the services provided by us at the time of registration.
- DPIN for 3 Directors
- Digital Signature For 7 Subscriberss
- Company Name search & approval
- MOA and AOA
- ROC Registration Fees
- Company Pan Card
- Company TAN
- Annual Compliance Guidance
- Maximum Time Required (45 days*)
Procedure for Registration
Fill Enquiry
Form
Associate will call
and discuss in length.
Make
Payment
Complete Documentation
& Requirements
Registration
Complete
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Frequently Asked Questions
FAQ
General Questions
Nidhi Company is the Company with the object of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members.The primary object of Nidhi is to carry on the business of accepting deposits and lending money to member.
The principle of mutual benefit has been to pool the savings from members and lend only to members and never have dealing with Nonmembers.
Members are only individuals. Bodies Corporate or Trusts are never to be admitted as Members
Nidhi are not expected to engage themselves in the business of Chit Fund, hire purchase, insurance or in any other business including investments in shares or debentures.
A Nidhi to be incorporated under the Companies Act, 2013 shall be a public company.
Nidhi shall have a minimum paid up equity share capital of five lakh rupees
Nidhi shall not issue preference shares.
Every Nidhi shall, within a period of one year from the commencement of these rules, ensure that it has not less than two hundred members;
The Director shall be a member of Nidhi. Therefore, it is mandatory for director of Nidhi Company to hold shares.
The Director of a Nidhi shall hold office for a term up to ten consecutive years on the Board of Nidhi. The Director shall be eligible for re-appointment only after the expiration of two years of ceasing to be a Director.
Every Nidhi shall issue equity shares of the nominal value of not less than ten rupees each.
Every Nidhi shall allot to each deposit holder at least a minimum of ten equity shares or shares equivalent to one hundred rupees.
A Nidhi shall not accept deposits exceeding twenty times of its Net Owned Funds (NOF) as per its last audited financial statements.
A Nidhi shall not declare dividend exceeding twenty five per cent or such higher amount as may be specifically approved by the Regional Director for reasons to be recorded in writing.