A Nidhi Company is required to be registered under Section 406 of the Companies Act, 2013 and Companies (Nidhi Companies) Rules, 2014. These entities are quite popular in the southern...
A Nidhi company is categorized as the NBFC but it doesn’t involve RBI license. A Nidhi company Registration comes under section 406 of the Companies Act, 2013. The fundamental business is taking and giving money (a borrowing and lending by monitory means) within its members making it a mutually benefiting company. in this article, we will discuss Essential Highlights on Nidhi Company Registration.
These activities are controlled by the ministry of corporate affairs. Nidhi Company has its basic concept of mutuality principals or “paraspar Mahayana”, which work for the benefit of members or shareholders.
How was Nidhi Company formed in India?
To form a Nidhi company in India, you will have to incorporate a limited company, under the company act 2013. With at least 3 directors and 7 shareholders, a Nidhi Company can be formed. However, precautions must be taken as to make sure that the aim of the company is encouraging savings among its members. The borrowing and lending of the money among the members only for their mutual benefit.
After the Nidhi company Registration, it should have the following:-
- At least 200 of the shareholders.
- The net owned funds by the Nidhi Company must be at least 10 lakhs or more.
- The net owned fund ratio of deposits must be 1:20.
What are the advantages of Nidhi Company Registration?
- There are institute offices that are single and have no outside interference.
- There must be mutually beneficial societies building a habit of saving between their involved members and work for the benefit of their depositing and borrowing members.
- Deposits are usually much lesser than handled by the other institutions in financial sectors.
- The term deposit is accepted by the members of only for a period of safe returns. It wouldn’t require any RBI license.
- This should provide easy loans to the involved members. The repayments are limited to just one year and 7 years, against the immovable property or the jewelry as their security. The less rate of interest is charged as compared to the bank loans.
What are the Essential Points of Nidhi Company Registration?
- Nidhi Company has to be incorporated as a public limited company with a minimum of 3 directors and 7 shareholders and a sum of 10 lakh rupees as capital.
- Nidhi company registration is done as a public company registration, and the process is the same as a public company except for a few additional steps.
- The net owned funds must be 10lakhs or more than that.
- The company must have no burden or impediment deposits not less than 10% of the outstanding deposits.
- A Nidhi company registration in India should have registered as Nidhi limited being part of its name.
- A Nidhi company must not issue preference shares.
- The ratio is 1:20 and not exceeding net owned funds.
In case if you are looking forward to getting the help of a professional who can guide you how to apply for Nidhi Company Registration then feel free to contact us anytime, we will guide you properly with a step-by-step procedure.