{"id":6820,"date":"2019-10-22T09:30:39","date_gmt":"2019-10-22T04:00:39","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=6820"},"modified":"2019-11-14T12:06:29","modified_gmt":"2019-11-14T06:36:29","slug":"5-reasons-to-start-a-nidhi-company-in-india","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/5-reasons-to-start-a-nidhi-company-in-india\/","title":{"rendered":"5 Reasons to Start a Nidhi Company In India"},"content":{"rendered":"\n<p>Immersed in the traditional roots of India, the term Nidhi refers to treasure.&nbsp; A Nidhi Company is a form of company in the non-banking financial sector incorporated under Section 406 of the Companies Act 2013. The primary objective of <a href=\"https:\/\/swaritadvisors.com\/nidhi-company-registration\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Nidhi Company (opens in a new tab)\">Nidhi Company<\/a> revolves around cultivating the habit of savings and thrift amidst its members.&nbsp; The companies doing Nidhi business of borrowing and lending money from members to members only get acknowledged by multiple names like Nidhi, Benefit Funds, Mutual Benefit Funds, Permanent Fund, and Mutual Benefit Company.<\/p>\n\n\n\n<p>Nidhi companies\nare mutual benefit societies whose dealings are limited to the members, and\nthe memberships are limited to individuals. The chief source of funds in a\nNidhi company is the offerings of its members. &nbsp;In such localized offices, the members get\nloans at relatively moderate rates for different purposes like house\nconstruction or repairs. Nidhi Company works in a confined environment that\nrestricts its immensity to take deposits. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3b6fa07f4c2\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3b6fa07f4c2\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/5-reasons-to-start-a-nidhi-company-in-india\/#A_Synopsis_of_deposits_by_Nidhi_Companies\" title=\"A Synopsis of deposits by Nidhi Companies \">A Synopsis of deposits by Nidhi Companies <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/5-reasons-to-start-a-nidhi-company-in-india\/#Specification_to_register_a_Nidhi_Company\" title=\"Specification to register a Nidhi Company\">Specification to register a Nidhi Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/5-reasons-to-start-a-nidhi-company-in-india\/#Post-registration_Requirements\" title=\"Post-registration Requirements:\">Post-registration Requirements:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/5-reasons-to-start-a-nidhi-company-in-india\/#Documents_Required_for_Nidhi_Company_Registration\" title=\"Documents Required for Nidhi Company Registration\">Documents Required for Nidhi Company Registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/5-reasons-to-start-a-nidhi-company-in-india\/#Top_5_reasons_to_establish_a_Nidhi_Company_in_India\" title=\"Top 5 reasons to establish a Nidhi Company in India:\">Top 5 reasons to establish a Nidhi Company in India:<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"A_Synopsis_of_deposits_by_Nidhi_Companies\"><\/span>A Synopsis of deposits by Nidhi Companies <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Here are the lists of rules that every Nidhi company ought\nto follow while undertaking deposits:<\/p>\n\n\n\n<ul><li>The Nidhi Companies shall not accept deposits exceeding\n20 times its Net Owned Funds; thus, the ratio of NOF and Nidhi Companies should\nnot be more than 1:20.<\/li><li>A Nidhi Company shall not accept or lend\ndeposits to any individual, other than its members.<\/li><li>They can\u2019t issue an advertisement in any form for\nsoliciting deposits. <\/li><\/ul>\n\n\n\n<div class=\"shadow5\"><p><b>Note :- <\/b>Details about Private Circulation of fixed deposit schemes amid the members of the Nidhi saying \u2018for private circulation to members only\u2019 shall not be considered as an advertisement for soliciting deposits.<\/p><\/div>\n\n\n\n<ul><li>Companies involved in Nidhi business should not\npay any brokerage or for the deployment of funds or incentives for mobilizing\ndeposits from members.<\/li><li>Such companies cannot pledge any of the assets\nlodged by its members as security.<\/li><li>Every Nidhi company shall grant at least a minimum\nof ten equity shares or shares equivalent to one hundred rupees to each deposit\nholder.<\/li><li>The deposits in the name of a minor are\nacceptable if they are made by the natural or legal guardian, a member of\nNidhi. However, a minor shall not get admitted as a member of Nidhi.<\/li><\/ul>\n\n\n\n<div class=\"browse\">\n<p>Browse through our articles on services provided at <a href=\"https:\/\/swaritadvisors.com\">Swarit Advisors<\/a>, and just let us know if we can help you with your NBFC registration or NBFC for Sale or RBI Advisory Services.<\/p>\n<div class=\"browse1\">\n<table class=\"table1\">\n<tbody>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/nbfc-registration\"><span>NBFC Registrtaion<\/a>&nbsp;<\/span><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/nbfc-registration\"><span>FFMC License<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/msme-registration\"><span>MSME Registration<\/span><\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/nbfc-takeover-agreement\"><span>NBFC Takeover<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/prepaid-wallet-license\"><span>Prepaid Wallet License<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/nidhi-company-registration\"><span>Nidhi Company Registration<\/span><\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/nbfc-for-sale\"><span >NBFC For Sale<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/peer-to-peer-lending-license\"><span >P2P Lending License<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/payment-gateway-license\"><span >Payment Gateway License<\/span><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/table>\n<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Specification_to_register_a_Nidhi_Company\"><\/span>Specification to register a Nidhi Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Since Nidhi got incorporated as a Public Company under the\nCompanies Act, 2013, so to set up a Nidhi Company, one needs to fulfill the\nfollowing requirements stated by the act:<\/p>\n\n\n\n<ul><li>To have a minimum paid-up equity share capital\nof INR 5 lakhs.<\/li><li>It requires a minimum of seven members to start\na Nidhi Company, out of which three members must be the directors of the\nestablished company.<\/li><li>Nidhi Companies cannot issue preference shares.\nIn case a company has issued preference shares in the past, then those shares\nshall be redeemed as per terms of the issue. <\/li><li>Every company thinking to start Nidhi business\nmust suffix \u00e2\u20ac\u02dcNidhi Limited\u00e2\u20ac\u2122 in its name. <\/li><li>The company shall have the sole objective of\ncultivating savings among its members wherein the receiving and lending money shall\nbe performed within the members.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Post-registration_Requirements\"><\/span>Post-registration Requirements:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Even after completing the incorporation\nstage, every Nidhi Company shall ensure to meet the following things within one\nyear from its incorporation:<\/p>\n\n\n\n<ul><li><strong>A minimum\nnumber of 200 Members<\/strong>: Nidhi companies need to have at least\n200 members to comply with the requirement of law. Besides, the company has to\nensure that the total members&nbsp;do not fall&nbsp;less than 200 at any me. <\/li><li><strong>Net Owned\nFund<\/strong>: Net Owned Funds of at\nleast Rupees 10 Lakhs and shall have Un-encumbered term Deposit of minimum 10%\nof its Outstanding Deposits.<\/li><li><strong>Ratio<\/strong>:\n&nbsp;The ratio of NOF to deposits shall not exceed 1:20. <\/li><li><strong>Members\u2019 restriction<\/strong>: Nidhi companies shall not admit a body corporate as a member. Further, a minor shall not be&nbsp;admired\nas a member. &nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_Required_for_Nidhi_Company_Registration\"><\/span>Documents Required for Nidhi Company Registration<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>One needs to have the following documents:<\/p>\n\n\n\n<ul><li><strong>Identity\nproof of shareholders and directors<\/strong>: It requires a copy of PAN card for\nIndian Nationals and an attested copy of Passport for foreign nationals.<\/li><li><strong>Residential proof\nof shareholders and directors<\/strong>:\nA copy of Aadhar card, Bank statement, driving license, electricity bill, or\nPassport. Amongst which, at least two documents must be valid and recent for\nabout two months old.&nbsp;<\/li><li><strong>Proof of registered\noffice<\/strong>: You need toprovideacopy ofRental Agreement or\nSales Deed, property tax receipt, electricity bill, or a No Objection\nCertificate (NOC) from the landlord to utilize the premises as a registered\noffice.<\/li><li><strong>Signed\nIncorporation Documents<\/strong>: &nbsp;A hard copy\nof Signed Digital Signature Application documents and a soft copy of other\nincorporation signed documents.<\/li><li><strong>Passport\nSize Photographs: <\/strong>Also, submit 2 to 3 passport size photographs of\ndirectors and shareholders. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Top_5_reasons_to_establish_a_Nidhi_Company_in_India\"><\/span>Top 5 reasons to establish a Nidhi Company in India:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Apart from nurturing the habit of thrift and savings, there\nare various other benefits that a Nidhi company cultivates. Let\u2019s have a look\nat them:<\/p>\n\n\n\n<ul><li><strong>Accessible to Form: <\/strong>the process of building a Nidhi company is simple, with minimal legal complications. You need 7 individuals, few documents, simple registration to incorporate them as a public company with the <a href=\"http:\/\/www.mca.gov.in\/MinistryV2\/nidhicompanies.html\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"MCA (opens in a new tab)\">MCA<\/a>. Thereby infuse the required amount of capital as per Nidhi Rules, 2014, and you are ready to go. <\/li><li><strong>Less Regulatory Compliance of RBI: <\/strong>being a part of NBFC, Nidhi companies do not require much approval of RBI. Such companies only compel by Nidhi Rules, 2014, and RBI has exempted them from following stringent compliance. Therefore, you don\u2019t need to hassle much as RBI will not interrupt in between if you are starting a Nidhi Company in India.<\/li><li><strong>Limited Capital Requirement: <\/strong>Originally, the MCA created a minimum capital requirement of INR 5 Lakhs for Nidhi companies, which got inflated to INR 10 lakhs as per Nidhi Rules, 2014. <\/li><li><strong>On-going concern<\/strong>: while possessing a Nidhi company, no person can claim your property until the time your company is ongoing operations. The Nidhi companies have the right to acquire and alienate property in their name.<\/li><li><strong>Uninterrupted existence<\/strong>: because of perpetual succession, there is an uninterrupted existence of a Nidhi company. It implies that the company remains unaffected by the departure or death of any member. The existence of the Nidhi Company shall continue irrespective of the change in any kind of membership.<\/li><\/ul>\n\n\n\n<p><div class=\"shadow4\">Now that you have all the right reasons to turn your dreams into reality. Start a Nidhi Company today with the guidance of our professionals. <\/div><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Immersed in the traditional roots of India, the term Nidhi refers to treasure.&nbsp; A Nidhi Company is a form of company in the non-banking financial sector incorporated under Section 406 of the Companies Act 2013. The primary objective of Nidhi Company revolves around cultivating the habit of savings and thrift amidst its members.&nbsp; The companies [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":6821,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[153],"tags":[154],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6820"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=6820"}],"version-history":[{"count":8,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6820\/revisions"}],"predecessor-version":[{"id":7186,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6820\/revisions\/7186"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/6821"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=6820"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=6820"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=6820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}