Nidhi Company

Nidhi Companies belong to the composition of non-banking financial companies. The registration of a Nidhi Company allows a Nidhi to borrow from its members and lend to the members. Nidhi companies registered in India are formed to inculcate the habit of thrift and savings among their members. Funds contributed to Nidhi Company are from its members only.

What are the benefits of getting Nidhi Company Registration?

Firstly, it is necessary to incorporate a Nidhi Company Limited capital. But it should be noted that it is necessary to incorporate as a limited company first.

The main objective of this form of entity is to raise money from the public. It is also a type of NBFC which performs activities like accepting deposits from members. So, a Nidhi company can easily raise funds.

Companies are registered under Section 406 of the Companies Act 2013; This form of entity is based on the mutual benefit principle. The primary beneficiaries are members of the entity's shareholders. Hence, a Nidhi company provides loans to its members easily.

An applicant can select a group of members to complete this process. Once a Nidhi Company is registered, there is no need to involve any outside management.

There are fewer compliances than other types of entities. Under the RBI Act, Nidhi companies are exempted from performing various types of compliances.

Under the Companies Act, this form of entity will secure limited liability status. Also, this form of entity is independent of the members and directors.

Since Nidhi companies are similar to NBFCs, they must comply with the requirements of NBFCs, and entities are exempted from a specific provision of the RBI Act.

There are fewer compliances for Nidhi companies as compared to credit societies regulated by the Societies Registration Act. So, when a person wants to follow low compliance, he can opt for Nidhi Company.

Nidhi Company.


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