What is a Nidhi Company?
“Nidhi” means a company incorporated with the object of Cultivating the habit of thrift and Savings amongst its members, Receiving deposits from, and Lending to, its members only, for their mutual benefit, and Which complies with rules of Chapter XXVI of Companies Rules, 2014. Nidhi, in the Indian context, means “TREASURE.” However, in the Indian financial sector, it refers to any mutual benefit society notified by the Central / Union Government as a Nidhi Company. They are created mainly for cultivating the habit of thrift and savings among their members.
Nidhi Company Registration.
The companies doing this business, viz. borrowing from members and Lending to members only, are known under names such as Nidhi, Permanent Fund, Benefit Funds, Mutual Benefit Funds, and Mutual Benefit Company.
We are the best source of providing you with the formation and development, along with the Nidhi Company Registration in Lucknow.
These loans are more prevalent in South India and are highly localized single-office institutions. They are mutually beneficial societies because their dealings are restricted only to the members, and membership is limited to individuals. The principal source of funds is the contribution from the members. The loans are given to the members at relatively reasonable rates for purposes such as house construction or repairs and are generally secured. The deposits mobilized by Nidhi’s are not much compared to the organized banking sector.
Since Nidhi’s come under one class of NBFCs, RBI is empowered to issue directions to them regarding their deposit acceptance activities.
The establishment of Nidhi Company in Lucknow is now made easier with the services of Business Buddy Services. We bring in our best game and foot forward.
However, in recognition of these Nidhi’s deal with their shareholder-members only, RBI has exempted the notified loan’s from the core provisions of the RBI Act and other directions applicable to NBFCs. As of date (February 2013), RBI does not have any specified regulatory framework for Nidhi’s.
Nidhi Company is registered under the Companies Act and notified as a Nidhi company by the Central Government under Section 620A of the Companies Act, 1956.
It is a non-banking finance company doing the business of Lending and borrowing with its members or shareholders.
All these issues are carefully improved and worked on by Business Buddy Services to create a perfect Nidhi CompanyRegistration in Lucknow.
Required Documents for Nidhi Company Registration:
Documents required in the Procedure of Nidhi Company Registration are:
Why do we need Nidhi Company Registration?
There are several advantages of starting a Nidhi Company in India. We will have a look into some of these:
Limited RBI regulatory compliance
Nidhi Companies need to incorporate themselves as Public Limited Companies with the MCA. And it’s not mandatory for them to get an RBI license to operate. However, they need to comply with the less stringent Nidhi Rules, 2014 and the Companies Act 2013 for their financial activities. They have the much-needed ease of regulatory compliances
Less Risky proposition
As per provisions of the rules, 2014, a Nidhi Company can provide loans to and accept deposits from its members only. This makes it a less risky proposition as the risk of loan default is less as compared to other businesses of similar nature. Also, as all financial activities are restricted to the members-only, there is less risk of external factors affecting the working of such companies. However, it’s one of the safest and the easiest ways of inviting deposits from the public. Register them as members.
Limited capital requirement
As mentioned in the Nidhi Rules, 2014, the minimum capital requirement to register a Nidhi Company is 10 Lakhs only.
Simple procedure of formation
The process of forming this type of company is fairly simple. You just need 7 members to start with, a few simple documents and then need to incorporate your company with the MCA through a simple registration process.
The normal operations of a Nidhi Company are not uninterrupted even at the death, insolvency, insanity or retirement of any member, thanks to the practice of perpetual succession. However, the Company will remain in operation irrespective of any such inevitable change in any type of membership.
Requirements for Nidhi Company registration:
The requirements of Nidhi Company registration in Lucknow are beautifully fulfilled and maintained in the formation of the Company. Business Buddy Services better put forward the process.